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Public Act 096-0897 |
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AN ACT concerning government.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Illinois Finance Authority Act is amended by | ||||
changing Sections 805-5, 805-15, 805-20, 830-5, 830-35, | ||||
830-45, and 830-50 and by adding Section 830-55 as follows:
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(20 ILCS 3501/805-5)
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Sec. 805-5. Findings and Declaration of Policy. It is | ||||
hereby found and
declared that a continuing need exists to | ||||
maintain and develop the State's
economy; that there are | ||||
significant barriers in the capital markets inhibiting
the | ||||
issuance by the Authority of industrial revenue bonds , loans, | ||||
and State Guarantees to assist in
financing
industrial | ||||
projects , farmers, and agribusiness in the State, particularly | ||||
for smaller firms; and that the
establishment of the Industrial | ||||
Revenue Bond Insurance Fund and the exercise by
the Authority | ||||
of the powers granted in
this Article will promote
economic | ||||
development by widening the market for the Authority's revenue | ||||
bonds , loans, and State Guarantees .
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(Source: P.A. 93-205, eff. 1-1-04.)
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(20 ILCS 3501/805-15)
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Sec. 805-15. Industrial Project Insurance Fund. There is |
created the
Industrial Project Insurance Fund, hereafter | ||
referred to in
Sections 805-15
through 805-50 of this Act as | ||
the "Fund". The Treasurer shall have custody of
the
Fund, which | ||
shall be held outside of the State treasury, except that | ||
custody
may
be transferred to and held by any bank, trust | ||
company or other fiduciary with
whom the Authority executes a | ||
trust agreement as authorized by paragraph (h) of
Section | ||
805-20 of this Act. Any portion of the Fund against which a | ||
charge has
been made, shall be held for the benefit of the | ||
holders of the loans or bonds
insured under
Section 805-20 of | ||
this Act or the holders of State Guarantees under Article 830 | ||
of this Act .
There shall be deposited in the Fund such amounts, | ||
including but not limited
to:
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(a) All receipts of bond and loan insurance premiums;
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(b) All proceeds of assets of whatever nature received by | ||
the Authority as a
result of default or delinquency with | ||
respect to insured loans or bonds or State Guarantees with
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respect to which payments from the Fund have been made, | ||
including proceeds from
the sale, disposal, lease or rental of | ||
real or personal property which the
Authority may receive under | ||
the provisions of
this Article but excluding the proceeds of | ||
insurance hereunder;
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(c) All receipts from any applicable contract or agreement | ||
entered into by
the Authority under paragraph (b) of Section | ||
805-20 of this Act;
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(d) Any State appropriations, transfers of appropriations, |
or transfers of
general obligation bond proceeds or other | ||
monies made available to the Fund.
Amounts in the Fund shall be | ||
used in accordance with the provisions of
this Article to | ||
satisfy any valid insurance claim payable
therefrom and may be | ||
used for any other purpose determined by the Authority in
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accordance with insurance contract or contracts with financial | ||
institutions
entered into pursuant to this Act, including | ||
without limitation protecting the
interest of the Authority in | ||
industrial projects during periods of loan
delinquency or upon | ||
loan default through the purchase of industrial projects in
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foreclosure proceedings or in lieu of foreclosure or through | ||
any other means.
Such amounts may also be used to pay | ||
administrative costs and expenses
reasonably allocable to the | ||
activities in connection with the Fund and to pay
taxes, | ||
maintenance, insurance, security and any other costs and | ||
expenses of
bidding for, acquiring, owning, carrying and | ||
disposing of industrial projects
which were financed with the | ||
proceeds of insured bonds or loans. In the case of
a default in | ||
payment with respect to any loan, mortgage or other agreement | ||
so
insured, the amount of the default shall immediately, and at | ||
all times during
the continuance of such default, and to the | ||
extent provided in any applicable
agreement, constitute a | ||
charge on the Fund.
Any amounts in the Fund not currently | ||
needed to meet the obligations of the
Fund may be invested as | ||
provided by law in obligations designated by the
Authority,
and | ||
all income from such investments shall become part of the Fund. |
In making
such investments, the Authority shall act with the | ||
care, skill, diligence and
prudence under the circumstances of | ||
a prudent person acting in a like capacity
in the conduct of an | ||
enterprise of like character and with like aims. It shall
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diversify such investments of the Authority so as to minimize | ||
the risk of large
losses, unless under the circumstances it is | ||
clearly not prudent to do so.
Amounts in the Fund may also be | ||
used to satisfy State Guarantees under Article 830 of this Act.
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(Source: P.A. 93-205, eff. 1-1-04; 94-91, eff. 7-1-05.)
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(20 ILCS 3501/805-20)
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Sec. 805-20. Powers and Duties; Industrial Project | ||
Insurance Program. The
Authority has the power:
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(a) To insure and make advance commitments to insure all or | ||
any part of the
payments required on the bonds issued or a loan | ||
made to finance any
environmental facility under the Illinois | ||
Environmental Facilities Financing
Act
or for any industrial | ||
project upon such terms and conditions as the Authority
may | ||
prescribe in accordance with
this Article. The
insurance | ||
provided by the Authority shall be payable solely from the Fund
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created by
Section 805-15 and shall not constitute a debt or | ||
pledge of the full
faith and credit of the State, the | ||
Authority, or any political subdivision
thereof;
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(b) To enter into insurance contracts, letters of credit or | ||
any other
agreements or contracts with financial institutions | ||
with respect to the Fund
and
any bonds or loans insured |
thereunder. Any such agreement or contract may
contain terms | ||
and provisions necessary or desirable in connection with the
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program, subject to the requirements established by this Act, | ||
including without
limitation terms and provisions relating to | ||
loan documentation, review and
approval procedures, | ||
origination and servicing rights and responsibilities,
default | ||
conditions, procedures and obligations with respect to | ||
insurance
contracts made under this Act. The agreements or | ||
contracts may be executed on
an individual, group or master | ||
contract basis with financial institutions;
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(c) To charge reasonable fees to defray the cost of | ||
obtaining letters of
credit
or other similar documents, other | ||
than insurance contracts under paragraph (b).
Any such fees | ||
shall be payable by such person, in such amounts and at such
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times
as the Authority shall determine, and the amount of the | ||
fees need not be
uniform
among the various bonds or loans | ||
insured;
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(d) To fix insurance premiums for the insurance of payments | ||
under the
provisions of
this Article. Such premiums shall be
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computed as determined by the Authority. Any premiums for the | ||
insurance of loan
payments under the provisions of this Act | ||
shall be payable by such person, in
such amounts and at such | ||
times as the Authority shall determine, and the amount
of the | ||
premiums need not be uniform among the various bonds or loans | ||
insured;
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(e) To establish application fees and prescribe |
application, notification,
contract and insurance forms, rules | ||
and regulations it deems necessary or
appropriate;
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(f) To make loans and to issue bonds secured by insurance | ||
or other
agreements
authorized by paragraphs (a) and (b) of | ||
this
Section 805-20 and to issue bonds
secured by loans that | ||
are guaranteed by the federal government or agencies
thereof;
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(g) To issue a single bond issue, or a series of bond | ||
issues, for a group of
industrial projects, a group of | ||
corporations, or a group of business entities
or
any | ||
combination thereof insured by insurance or backed by any other | ||
agreement
authorized by paragraphs (a) and (b) of this
Section | ||
or secured by loans that
are guaranteed by the federal | ||
government or agencies thereof;
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(h) To enter into trust agreements for the management of | ||
the Fund created
under Section 805-15 of this Act; and
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(i) To exercise such other powers as are necessary or | ||
incidental to the powers granted in this Section and to the | ||
issuance of State Guarantees under Article 830 of this Act
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foregoing .
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(j) At the discretion of the Authority, to insure and make | ||
advance commitments to insure, and issue State Guarantees for, | ||
all or any part of the payments required on the bonds issued or | ||
loans made to finance any agricultural facility, project, | ||
farmer, producer, agribusiness, or program under Article 830 of | ||
this Act upon such terms and conditions as the Authority may | ||
prescribe in accordance with this Article. The insurance and |
State Guarantees provided by the Authority may be payable from | ||
the Fund created by Section 805-15 and is in addition to and | ||
not in replacement of the Illinois Agricultural Loan Guarantee | ||
Fund and the Illinois Farmer and Agribusiness Loan Guarantee | ||
Fund created under Article 830 of this Act. | ||
(Source: P.A. 93-205, eff. 1-1-04.)
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(20 ILCS 3501/830-5)
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Sec. 830-5. The Authority shall have the following powers:
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(a) To loan its funds to one or more persons to be used by | ||
such persons to
pay
the costs of acquiring, constructing, | ||
reconstructing or improving Agricultural
Facilities, soil or | ||
water conservation projects or watershed areas, such loans
to | ||
be on such terms and conditions, and for such period of time, | ||
and secured or
evidenced by such mortgages, deeds of trust, | ||
notes, debentures, bonds or other
secured or unsecured | ||
evidences of indebtedness of such persons as the Board may
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determine;
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(b) To loan its funds to any agribusiness which operates or | ||
will operate a
facility located in Illinois for those purposes | ||
permitted by rules and
regulations issued pursuant to the | ||
Internal Revenue Code of 1954, as amended,
relating to the use | ||
of moneys loaned from the proceeds from the issuance of
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industrial development revenue bonds; such loans shall be on | ||
terms and
conditions, and for periods of time, and secured or | ||
evidenced by mortgages,
deeds of trust, notes, debentures, |
bonds or other secured or unsecured
evidences
of indebtedness | ||
of such agribusiness as the Board may require;
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(c) To purchase, or to make commitments to purchase, from | ||
lenders notes,
debentures, bonds or other evidences of | ||
indebtedness secured by mortgages,
deeds of trust, or security | ||
devices, or unsecured, as the Authority may
determine, or | ||
portions thereof or participations therein, which notes, | ||
bonds,
or other evidences of indebtedness shall have been or | ||
will be executed by the
obligors thereon to obtain funds with | ||
which to acquire, by purchase,
construction, or otherwise, | ||
reconstruct or improve Agricultural Facilities;
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(d) To contract with lenders or others for the origination | ||
of or the
servicing
of the loans made by the Authority pursuant | ||
to this
Section or
represented by the notes, bonds, or other | ||
evidences of indebtedness which it
has purchased pursuant to | ||
this
Section; provided that such
servicing fees shall not | ||
exceed one percent per annum of the principal amount
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outstanding owed to the Authority; and
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(e) To enter into a State Guarantee with a lender or a | ||
person holding a note
and
to sell or issue such State | ||
Guarantees, bonds or evidences of indebtedness in a
primary or | ||
a secondary market and to make payment on a State Guarantee | ||
from available sources, including but not limited to, the | ||
Illinois Agricultural Loan Guarantee Fund and the Illinois | ||
Farmer and Agribusiness Loan Guarantee Fund created under | ||
Section 830-30 and Section 830-35, respectively, and the |
Industrial Project Insurance Fund created under Article 805 of | ||
this Act .
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(Source: P.A. 93-205, eff. 1-1-04.)
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(20 ILCS 3501/830-35)
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Sec. 830-35.
State Guarantees for loans to farmers and | ||
agribusiness;
eligibility.
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(a) The Authority is authorized to issue State Guarantees | ||
to lenders for
loans
to eligible farmers and agribusinesses for | ||
purposes set forth in this
Section.
For purposes of this
| ||
Section, an eligible farmer shall be a resident of Illinois
(i) | ||
who is principal operator of a farm or land, at least 50% of | ||
whose annual
gross income is derived from farming, (ii) whose | ||
annual total sales of
agricultural products, commodities, or | ||
livestock exceeds $20,000, and (iii)
whose net worth does not | ||
exceed $500,000. An eligible agribusiness shall be
that as | ||
defined in
Section 801-10 of this Act.
The Authority may | ||
approve applications by farmers and agribusinesses that
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promote diversification of the farm economy of this State | ||
through the growth
and
development of new crops or livestock | ||
not customarily grown or produced in this
State or that | ||
emphasize a vertical integration of grain or livestock produced
| ||
or
raised in this State into a finished agricultural product | ||
for consumption or
use. "New crops or livestock not customarily | ||
grown or produced in this State"
shall not include corn, | ||
soybeans, wheat, swine, or beef or dairy cattle.
"Vertical |
integration of grain or livestock produced or raised in this | ||
State"
shall include any new or existing grain or livestock | ||
grown or produced in this
State.
Lenders shall apply for the | ||
State Guarantees on forms provided by the
Authority,
certify | ||
that the application and any other documents submitted are true | ||
and
correct, and pay an administrative fee as determined by the | ||
Authority. The
applicant shall be responsible for paying any | ||
fees or charges involved in
recording mortgages, releases, | ||
financing statements, insurance for secondary
market issues | ||
and any other similar fees or charges as the Authority may
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require. The application shall at a minimum contain the | ||
farmer's or
agribusiness' name, address, present credit and | ||
financial information,
including cash flow statements, | ||
financial statements, balance sheets, and any
other
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information pertinent to the application, and the collateral to | ||
be used to
secure the State Guarantee. In addition, the lender | ||
must agree to charge an
interest rate, which may vary, on the | ||
loan that the Authority determines to be
below the market rate | ||
of interest generally available to the borrower. If both
the | ||
lender and applicant agree, the interest rate on the State | ||
Guarantee Loan
can be converted to a fixed interest rate at any | ||
time during the term of the
loan.
Any State Guarantees provided | ||
under this
Section (i) shall not exceed $500,000
per farmer or | ||
an amount as determined by the Authority on a case-by-case
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basis for an agribusiness, (ii) shall not exceed a term of 15 | ||
years, and (iii)
shall be subject to an annual review and |
renewal by the lender and the
Authority; provided that only one | ||
such State Guarantee shall be made per farmer
or agribusiness, | ||
except that additional State Guarantees may be made for
| ||
purposes of expansion of projects financed in part by a | ||
previously issued State
Guarantee. No State Guarantee shall be | ||
revoked by the Authority without a
90-day notice, in writing, | ||
to all parties. The lender shall not call due any
loan
for any | ||
reason except for lack of performance, insufficient | ||
collateral, or
maturity. A lender may review and withdraw or | ||
continue with a State Guarantee
on an annual basis after the | ||
first 5 years following closing of the loan
application if the | ||
loan contract provides for an interest rate that shall not
| ||
vary. A lender shall not withdraw a State Guarantee if the loan | ||
contract
provides for an interest rate that may vary, except | ||
for reasons set forth
herein.
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(b) The Authority shall provide or renew a State Guarantee | ||
to a lender if:
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(i) A fee equal to 25 basis points on the loan is paid | ||
to the Authority on
an annual
basis by the lender.
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(ii) The application provides collateral acceptable to | ||
the
Authority that is at least equal to the State's portion | ||
of the Guarantee to be
provided.
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(iii) The lender assumes all responsibility and costs | ||
for pursuing
legal action on collecting any loan that is | ||
delinquent or in default.
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(iv) The
lender is responsible for the first 15% of the |
outstanding principal of the
note
for which the State | ||
Guarantee has been applied.
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(c) There is hereby created outside of the State treasury a | ||
special fund to
be
known as the Illinois Farmer and | ||
Agribusiness Loan Guarantee Fund. The State
Treasurer shall be | ||
custodian of this Fund. Any amounts in the Fund not
currently | ||
needed to meet the obligations of the Fund shall be invested as
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provided by law, and all interest earned from these investments | ||
shall be
deposited into the Fund until the Fund reaches the | ||
maximum amounts authorized
in
this Act; thereafter, interest | ||
earned shall be deposited into the General
Revenue Fund. After | ||
September 1, 1989, annual investment earnings equal to 1.5%
of | ||
the Fund shall remain in the Fund to be used for the purposes | ||
established in
Section 830-40 of this Act. The Authority is | ||
authorized to transfer such
amounts
as are necessary to satisfy | ||
claims from available appropriations and from fund
balances of | ||
the Farm Emergency Assistance Fund as of June 30 of each year | ||
to
the
Illinois Farmer and Agribusiness Loan Guarantee Fund to | ||
secure State Guarantees
issued under this
Section and
Sections | ||
830-45 , and 830-50 , and 830-55 . If for any reason the
General | ||
Assembly fails to make an appropriation sufficient to meet | ||
these
obligations, this Act shall constitute an irrevocable and | ||
continuing
appropriation of an amount necessary to secure | ||
guarantees as defaults occur and
the irrevocable and continuing | ||
authority for, and direction to, the State
Treasurer and the | ||
Comptroller to make the necessary transfers to the Illinois
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Farmer and Agribusiness Loan Guarantee Fund, as directed by the | ||
Governor, out
of
the General Revenue Fund. In the event of | ||
default by the borrower on State
Guarantee Loans under this
| ||
Section,
Section 830-45 , or
Section 830-50, or Section 830-55, | ||
the lender
shall be entitled to, and the Authority shall direct | ||
payment on, the State
Guarantee after 90 days of delinquency. | ||
All payments by the Authority shall be
made from the Illinois | ||
Farmer and Agribusiness Loan Guarantee Fund to satisfy
claims | ||
against the State Guarantee. It shall be the responsibility of | ||
the
lender to proceed with the collecting and disposing of | ||
collateral on the State
Guarantee under this
Section,
Section | ||
830-45 , or
Section 830-50 , or Section 830-55 within 14 months | ||
of
the time the State Guarantee is declared delinquent. If the | ||
lender does not
dispose of the collateral within 14 months, the | ||
lender shall be liable to repay
to the State interest on the | ||
State Guarantee equal to the same rate that the
lender charges | ||
on the State Guarantee, provided that the Authority shall have
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the authority to extend the 14-month period for a lender in the | ||
case of
bankruptcy or extenuating circumstances. The Fund shall | ||
be reimbursed for any
amounts paid under this
Section,
Section | ||
830-45 , or
Section 830-50 , or Section 830-55 upon liquidation
| ||
of the collateral.
The Authority, by resolution of the Board, | ||
may borrow sums from the Fund and
provide for repayment as soon | ||
as may be practical upon receipt of payments of
principal and | ||
interest by a borrower on State Guarantee Loans under this
| ||
Section,
Section 830-45 , or
Section 830-50 , or Section 830-55 . |
Money may be borrowed from the Fund by
the Authority for the | ||
sole purpose of paying certain interest costs for
borrowers | ||
associated with selling a loan subject to a State Guarantee | ||
under
this
Section,
Section 830-45 , or
Section 830-50 , or | ||
Section 830-55 in a secondary market as may be deemed
| ||
reasonable and necessary by the Authority.
| ||
(d) Notwithstanding the provisions of this
Section 830-35 | ||
with respect to the
farmers, agribusinesses, and lenders who | ||
may obtain State Guarantees, the
Authority may promulgate rules | ||
establishing the eligibility of farmers,
agribusinesses, and | ||
lenders to participate in the State Guarantee program and
the | ||
terms, standards, and procedures that will apply, when the | ||
Authority finds
that emergency conditions in Illinois | ||
agriculture have created the need for
State Guarantees pursuant | ||
to terms, standards, and procedures other than those
specified | ||
in this
Section.
| ||
(Source: P.A. 93-205, eff. 1-1-04.)
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(20 ILCS 3501/830-45)
| ||
Sec. 830-45. Young Farmer Loan Guarantee Program.
| ||
(a) The Authority is authorized to issue State Guarantees | ||
to lenders for
loans
to finance or refinance debts of young | ||
farmers. For the purposes of this
Section, a young farmer is a | ||
resident of Illinois who is at least 18 years of
age and who is | ||
a principal operator of a farm or land, who derives at least | ||
50%
of annual gross income from farming, whose net worth is not |
less than $10,000
and whose debt to asset ratio is not less | ||
than 40%. For the purposes of this
Section, debt to asset ratio | ||
means current outstanding liabilities, including
any debt to be | ||
financed or refinanced under this
Section 830-45, divided by
| ||
current outstanding assets. The Authority shall establish the | ||
maximum
permissible debt to asset ratio based on criteria | ||
established by the Authority.
Lenders shall apply for the State | ||
Guarantees on forms provided by the Authority
and certify that | ||
the application and any other documents submitted are true and
| ||
correct. The lender or borrower, or both in combination, shall | ||
pay an
administrative fee as determined by the Authority. The | ||
applicant shall be
responsible for paying any fee or charge | ||
involved in recording mortgages,
releases, financing | ||
statements, insurance for secondary market issues, and any
| ||
other similar fee or charge that the Authority may require. The | ||
application
shall at a minimum contain the young farmer's name, | ||
address, present credit and
financial information, including | ||
cash flow statements, financial statements,
balance sheets, | ||
and any other information pertinent to the application, and the
| ||
collateral to be used to secure the State Guarantee. In | ||
addition, the borrower
must certify to the Authority that, at | ||
the time the State Guarantee is
provided,
the borrower will not | ||
be delinquent in the repayment of any debt. The lender
must | ||
agree to charge a fixed or adjustable interest rate that the | ||
Authority
determines to be below the market rate of interest | ||
generally available to the
borrower. If both the lender and |
applicant agree, the interest rate on the
State guaranteed loan | ||
can be converted to a fixed interest rate at any time
during | ||
the term of the loan.
State Guarantees provided under this
| ||
Section (i) shall not exceed $500,000 per
young farmer, (ii) | ||
shall be set up on a payment schedule not to exceed 30
years,
| ||
but shall be no longer than 15 years in duration, and (iii) | ||
shall be subject to
an annual review and renewal by the lender | ||
and the Authority. A young farmer
may
use this program more | ||
than once provided the aggregate principal amount of
State
| ||
Guarantees under this
Section to that young farmer does not | ||
exceed $500,000. No
State Guarantee shall be revoked by the | ||
Authority without a 90-day notice, in
writing, to all parties.
| ||
(b) The Authority shall provide or renew a State Guarantee | ||
to a lender if:
| ||
(i) The lender pays a fee equal to 25 basis points on | ||
the loan to the
Authority on
an annual basis.
| ||
(ii) The application provides collateral acceptable to | ||
the
Authority that is at least equal to the State | ||
Guarantee.
| ||
(iii) The lender
assumes all responsibility and costs | ||
for pursuing legal action on collecting
any
loan that is | ||
delinquent or in default.
| ||
(iv) The lender is at risk for the
first 15% of the | ||
outstanding principal of the note for which the State
| ||
Guarantee
is provided.
| ||
(c) The Illinois Agricultural Loan Guarantee Fund and the |
Illinois Farmer and Agribusiness Loan Guarantee Fund may be | ||
used to
secure State Guarantees issued under this
Section as | ||
provided in
Section 830-30 and Section 830-35 , respectively .
| ||
(d) Notwithstanding the provisions of this
Section 830-45 | ||
with respect to the
young farmers and lenders who may obtain | ||
State Guarantees, the Authority may
promulgate rules | ||
establishing the eligibility of young farmers and lenders to
| ||
participate in the State Guarantee program and the terms, | ||
standards, and
procedures that will apply, when the Authority | ||
finds that emergency conditions
in Illinois agriculture have | ||
created the need for State Guarantees pursuant to
terms, | ||
standards, and procedures other than those specified in this
| ||
Section.
| ||
(Source: P.A. 93-205, eff. 1-1-04.)
| ||
(20 ILCS 3501/830-50)
| ||
Sec. 830-50. Specialized Livestock Guarantee Program.
| ||
(a) The Authority is authorized to issue State Guarantees | ||
to lenders for
loans
to finance or refinance debts for | ||
specialized livestock operations that are or
will be located in | ||
Illinois. For purposes of this
Section, a "specialized
| ||
livestock operation" includes, but is not limited to, dairy, | ||
beef, and swine
enterprises. For purposes of this Section, a | ||
specialized livestock operation also includes livestock | ||
operations using anaerobic digestors to generate electricity.
| ||
(b) Lenders shall apply for the State Guarantees on forms |
provided by the
Authority and certify that the application and | ||
any other documents submitted
are true and correct. The lender | ||
or borrower, or both in combination, shall pay
an | ||
administrative fee as determined by the Authority. The | ||
applicant shall be
responsible for paying any fee or charge | ||
involved in recording mortgages,
releases, financing | ||
statements, insurance for secondary market issues, and any
| ||
other similar fee or charge that the Authority may require. The | ||
application
shall, at a minimum, contain the farmer's name, | ||
address, present credit and
financial information, including | ||
cash flow statements, financial statements,
balance sheets, | ||
and any other information pertinent to the application, and the
| ||
collateral to be used to secure the State Guarantee. In | ||
addition, the borrower
must certify to the Authority that, at | ||
the time the State Guarantee is
provided,
the borrower will not | ||
be delinquent in the repayment of any debt. The lender
must | ||
agree to charge a fixed or adjustable interest rate that the | ||
Authority
determines to be below the market rate of interest | ||
generally available to the
borrower. If both the lender and | ||
applicant agree, the interest rate on the
State guaranteed loan | ||
can be converted to a fixed interest rate at any time
during | ||
the term of the loan.
| ||
(c) State Guarantees provided under this
Section (i) shall | ||
not exceed
$1,000,000 per applicant, (ii) shall be no longer | ||
than 15 years in duration,
and
(iii) shall be subject to an | ||
annual review and renewal by the lender and the
Authority. An |
applicant may use this program more than once, provided that | ||
the
aggregate principal amount of State Guarantees under this
| ||
Section to that
applicant does not exceed $1,000,000. A State | ||
Guarantee shall not be revoked by
the Authority without a | ||
90-day notice, in writing, to all parties.
| ||
(d) The Authority shall provide or renew a State Guarantee | ||
to a lender if:
(i) The lender pays a fee equal to 25 basis | ||
points on the loan to the Authority
on
an annual basis. (ii) | ||
The application provides collateral acceptable to the
| ||
Authority that is at least equal to the State Guarantee. (iii) | ||
The lender
assumes all responsibility and costs for pursuing | ||
legal action on collecting
any
loan that is delinquent or in | ||
default. (iv) The lender is at risk for the first
15% of the | ||
outstanding principal of the note for which the State Guarantee | ||
is
provided.
| ||
(e) The Illinois Agricultural Loan Guarantee Fund and the | ||
Illinois Farmer and Agribusiness Loan Guarantee Fund may be | ||
used to
secure State Guarantees issued under this
Section as | ||
provided in
Section 830-30 and Section 830-35 , respectively .
| ||
(f) Notwithstanding the provisions of this
Section 830-50 | ||
with respect to the
specialized livestock operations and | ||
lenders who may obtain State Guarantees,
the Authority may | ||
promulgate rules establishing the eligibility of specialized
| ||
livestock operations and lenders to participate in the State | ||
Guarantee program
and the terms, standards, and procedures that | ||
will apply, when the Authority
finds that emergency conditions |
in Illinois agriculture have created the need
for State | ||
Guarantees pursuant to terms, standards, and procedures other | ||
than
those specified in this Section.
| ||
(Source: P.A. 95-697, eff. 11-6-07.)
| ||
(20 ILCS 3501/830-55 new) | ||
Sec. 830-55. Working Capital Loan Guarantee Program. | ||
(a) The Authority is authorized to issue State Guarantees | ||
to lenders for loans to finance needed input costs related to | ||
and in connection with planting and raising agricultural crops | ||
and commodities in Illinois. Eligible input costs include, but | ||
are not limited to, fertilizer, chemicals, feed, seed, fuel, | ||
parts, and repairs. At the discretion of the Authority, the | ||
farmer, producer, or agribusiness must be able to provide the | ||
originating lender with a first lien on the proposed crop or | ||
commodity to be raised and an assignment of Federal Crop | ||
Insurance sufficient to secure the Working Capital Loan. | ||
Additional collateral may be required as deemed necessary by | ||
the lender and the Authority. | ||
For the purposes of this Section, an eligible farmer, | ||
producer, or agribusiness is a resident of Illinois who is at | ||
least 18 years of age and who is a principal operator of a farm | ||
or land, who derives at least 50% of annual gross income from | ||
farming, and whose debt to asset ratio is not less than 40%. | ||
For the purposes of this Section, debt to asset ratio means | ||
current outstanding liabilities, including any debt to be |
financed or refinanced under this Section 830-55, divided by | ||
current outstanding assets. The Authority shall establish the | ||
maximum permissible debt to asset ratio based on criteria | ||
established by the Authority. Lenders shall apply for the State | ||
Guarantees on forms provided by the Authority and certify that | ||
the application and any other documents submitted are true and | ||
correct. The lender or borrower, or both in combination, shall | ||
pay an administrative fee as determined by the Authority. The | ||
applicant shall be responsible for paying any fee or charge | ||
involved in recording mortgages, releases, financing | ||
statements, insurance for secondary market issues, and any | ||
other similar fee or charge that the Authority may require. The | ||
application shall at a minimum contain the borrower's name, | ||
address, present credit and financial information, including | ||
cash flow statements, financial statements, balance sheets, | ||
and any other information pertinent to the application, and the | ||
collateral to be used to secure the State Guarantee. In | ||
addition, the borrower must certify to the Authority that, at | ||
the time the State Guarantee is provided, the borrower will not | ||
be delinquent in the repayment of any debt. The lender must | ||
agree to charge a fixed or adjustable interest rate that the | ||
Authority determines to be below the market rate of interest | ||
generally available to the borrower. If both the lender and | ||
applicant agree, the interest rate on the State guaranteed loan | ||
can be converted to a fixed interest rate at any time during | ||
the term of the loan. State Guarantees provided under this |
Section (i) shall not exceed $250,000 per borrower, (ii) shall | ||
be repaid annually, and (iii) shall be subject to an annual | ||
review and renewal by the lender and the Authority. The State | ||
Guarantee may be renewed annually, for a period not to exceed 3 | ||
total years per State Guarantee, if the borrower meets | ||
financial criteria and other conditions, as established by the | ||
Authority. A farmer or agribusiness may use this program more | ||
than once provided the aggregate principal amount of State | ||
Guarantees under this Section to that farmer or agribusiness | ||
does not exceed $250,000 annually. No State Guarantee shall be | ||
revoked by the Authority without a 90-day notice, in writing, | ||
to all parties. | ||
(b) The Authority shall provide a State Guarantee to a | ||
lender if: | ||
(i) The borrower pays to the Authority a fee equal to | ||
100 basis points on the loan. | ||
(ii) The application provides collateral acceptable to | ||
the Authority that is at least equal to the State | ||
Guarantee. | ||
(iii) The lender assumes all responsibility and costs | ||
for pursuing legal action on collecting any loan that is | ||
delinquent or in default. | ||
(iv) The lender is at risk for the first 15% of the | ||
outstanding principal of the note for which the State | ||
Guarantee is provided. | ||
(c) The Illinois Agricultural Loan Guarantee Fund and the |
Illinois Farmer and Agribusiness Loan Guarantee Fund may be | ||
used to secure State Guarantees issued under this Section as | ||
provided in Section 830-30 and Section 830-35, respectively. | ||
(d) Notwithstanding the provisions of this Section 830-55 | ||
with respect to the borrowers and lenders who may obtain State | ||
Guarantees, the Authority may promulgate rules establishing | ||
the eligibility of borrowers and lenders to participate in the | ||
State Guarantee program and the terms, standards, and | ||
procedures that will apply, when the Authority finds that | ||
emergency conditions in Illinois agriculture have created the | ||
need for State Guarantees pursuant to terms, standards, and | ||
procedures other than those specified in this Section.
| ||
Section 99. Effective date. This Act takes effect upon | ||
becoming law.
|