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| Public Act 099-0509 | ||||
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AN ACT concerning government.
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Be it enacted by the People of the State of Illinois, | ||||
represented in the General Assembly:
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Section 5. The Illinois Finance Authority Act is amended by | ||||
changing Sections 805-20, 830-30, 830-35, 830-45, and 830-55 | ||||
and by adding Article 835 as follows:
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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:
| ||||
(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
| ||||
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
| ||
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;
| ||
(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
| ||
times
as the Authority shall determine, and the amount of the | ||
fees need not be
uniform
among the various bonds or loans | ||
insured;
| ||
(d) to fix insurance premiums for the insurance of payments | ||
under the
provisions of
this Article. Such premiums shall be
| ||
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;
| ||
(e) to establish application fees and prescribe | ||
application, notification,
contract and insurance forms, rules | ||
and regulations it deems necessary or
appropriate;
| ||
(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;
| ||
(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;
| ||
(h) to enter into trust agreements for the management of | ||
the Fund created
under Section 805-15 of this Act;
| ||
(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; and
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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, qualified veteran-owned small | ||
business, or program under Article 830 or Article 835 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. 96-897, eff. 5-24-10; 97-333, eff. 8-12-11.)
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(20 ILCS 3501/830-30)
| ||
Sec. 830-30. State Guarantees for existing debt.
| ||
(a) The Authority is authorized to issue State Guarantees | ||
for farmers'
existing
debts held by a lender. For the purposes | ||
of this
Section, a farmer shall be a
resident of Illinois, who | ||
is a principal operator of a farm or land, at least
50% of | ||
whose annual gross income is derived from farming and whose | ||
debt to
asset
ratio shall not be less than 40%, except in those | ||
cases where the applicant has
previously used the guarantee | ||
program there shall be no debt to asset ratio or
income | ||
restriction. For the purposes of this
Section, debt to asset | ||
ratio shall
mean the current outstanding liabilities of the | ||
farmer divided by the current
outstanding assets of the farmer. | ||
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 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 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 lender
| ||
must agree to bring the farmer's debt to a current status at | ||
the time the State
Guarantee is provided and must also agree to | ||
charge a fixed or adjustable
interest rate which 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, (ii) shall be set up | ||
on a payment schedule not to exceed 30 years,
and shall be no | ||
longer than 30 years in duration, 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 | ||
outstanding per farmer at any one time. No
State Guarantee | ||
shall be revoked by the Authority without a 90-day notice, in
| ||
writing, to all parties. In those cases where the borrower has | ||
not previously
used the guarantee program, the lender shall not | ||
call due any loan during the
first 3 years for any reason | ||
except for lack of performance or insufficient
collateral. The | ||
lender can review and withdraw or continue with the State
| ||
Guarantee on an annual basis after the first 3 years of the | ||
loan, provided a
90-day notice, in writing, to all parties has | ||
been given.
| ||
(b) The Authority shall provide or renew a State Guarantee | ||
to a lender if:
| ||
(i) A fee equal to 25 basis points on the loan is paid | ||
to the Authority on
an
annual
basis by the lender.
| ||
(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.
| ||
(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 responsible for the first 15% of the | ||
outstanding principal of the
note
for which the State | ||
Guarantee has been applied.
| ||
(c) There is hereby created outside of the State treasury a | ||
special fund to
be
known as the Illinois Agricultural Loan | ||
Guarantee Fund. The State Treasurer
shall be custodian of this | ||
Fund. Any amounts in the Illinois Agricultural Loan
Guarantee | ||
Fund not currently needed to meet the obligations of the Fund | ||
shall
be
invested as provided by law, and all interest earned | ||
from these investments
shall be deposited into the Fund until | ||
the Fund reaches the maximum amount
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 to the Fund such | ||
amounts as are necessary to satisfy claims during the
duration | ||
of the State Guarantee program to secure State Guarantees | ||
issued under
this
Section, provided that amounts to be paid | ||
from the Industrial Project Insurance Fund created under | ||
Article 805 of this Act may be paid by the Authority directly | ||
to satisfy claims and need not
be deposited first into the | ||
Illinois Agricultural Loan Guarantee Fund. 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 Agricultural Loan Guarantee Fund, as | ||
directed by the
Governor, out of the General Revenue Fund. | ||
Within 30 days after November 15,
1985, the Authority may | ||
transfer up to $7,000,000 from available appropriations
into | ||
the Illinois Agricultural Loan Guarantee Fund for the purposes | ||
of this
Act.
Thereafter, the Authority may transfer additional | ||
amounts into the Illinois
Agricultural Loan Guarantee Fund to | ||
secure guarantees for defaults as defaults
occur. In the event | ||
of default by the farmer, 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
Agricultural Loan Guarantee | ||
Fund to satisfy claims against the State Guarantee shall be | ||
made, in whole or in part, from any of the following funds in | ||
such order and in such amounts as the Authority shall | ||
determine: (1) the Industrial Project Insurance Fund created | ||
under Article 805 of this Act (if the Authority exercises its | ||
discretion under subsection (j) of Section 805-20); (2) the | ||
Illinois Agricultural Loan Guarantee Fund; or (3) the Illinois | ||
Farmer and Agribusiness Loan Guarantee Fund.
The Illinois | ||
Agricultural Loan Guarantee Fund shall guarantee receipt of | ||
payment
of the 85% of the principal and interest owed on the | ||
State Guarantee Loan by the
farmer to the guarantee holder, | ||
provided that payments by the Authority to satisfy claims | ||
against the State Guarantee shall be made in accordance with | ||
the preceding sentence. 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 | ||
830-35, Section 830-45, Section 830-50, Section 830-55, or | ||
Article 835
within 14 months of the time the State Guarantee is | ||
declared delinquent;
provided, however, that the lender shall | ||
not collect or dispose of collateral on
the State Guarantee | ||
without the express written prior approval of the Authority.
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 which the lender | ||
charges on the State Guarantee; provided,
however, that the | ||
Authority may extend the 14-month period for a lender in the
| ||
case of bankruptcy or extenuating circumstances. The Fund from | ||
which a payment is made shall be reimbursed
for any amounts | ||
paid from that Fund under this
Section, Section 830-35, Section | ||
830-45, Section 830-50, Section 830-55, or Article 835 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 farmer. Money may be borrowed | ||
from the Fund by the Authority
for the sole purpose of paying | ||
certain interest costs for farmers associated
with selling a | ||
loan subject to a State Guarantee in a secondary market as may
| ||
be
deemed reasonable and necessary by the Authority.
| ||
(d) Notwithstanding the provisions of this
Section 830-30 | ||
with respect to the
farmers and lenders who may obtain State | ||
Guarantees, the Authority may
promulgate rules establishing | ||
the eligibility of 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.)
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(20 ILCS 3501/830-35)
| ||
Sec. 830-35. State Guarantees for loans to farmers and | ||
agribusiness;
eligibility. | ||
(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
| ||
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
| ||
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
| ||
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
| ||
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.
| ||
(b) The Authority shall provide or renew a State Guarantee | ||
to a lender if:
| ||
(i) A fee equal to 25 basis points on the loan is paid | ||
to the Authority on
an annual
basis by the lender.
| ||
(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.
| ||
(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 responsible for the first 15% of the | ||
outstanding principal of the
note
for which the State | ||
Guarantee has been applied.
| ||
(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
| ||
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 | ||
830-30, 830-45, 830-50, and 830-55, and Article 835 of this | ||
Act. Amounts to be paid from the Industrial Project Insurance | ||
Fund created under Article 805 of this Act may be paid by the | ||
Authority directly to satisfy claims and need not be deposited | ||
first into the Illinois Farmer and Agribusiness Loan Guarantee | ||
Fund. 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
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,
| ||
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 shall be made, in whole or in part, from any of | ||
the following funds in such order and in such amounts as the | ||
Authority shall determine: (1) the Industrial Project | ||
Insurance Fund created under Article 805 of this Act (if the | ||
Authority exercises its discretion under subsection (j) of | ||
Section 805-20); (2) the Illinois Farmer and Agribusiness Loan | ||
Guarantee Fund; or (3) the Illinois Farmer and Agribusiness | ||
Loan Guarantee Fund. 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,
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
| ||
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 | ||
830-30,
Section 830-45,
Section 830-50, or Section 830-55, or | ||
Article 835 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 830-30,
Section | ||
830-45,
Section 830-50, or Section 830-55, or Article 835. | ||
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 830-30,
Section 830-45,
Section | ||
830-50, or Section 830-55, or Article 835 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. 96-897, eff. 5-24-10.)
| ||
(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, and the | ||
Industrial Project Insurance Fund may be used to
secure State | ||
Guarantees issued under this
Section as provided in
Section | ||
830-30, and Section 830-35, and subsection (j) of Section | ||
805-20, respectively. All payments by the Authority to satisfy | ||
claims against the State Guarantee shall be made, in whole or | ||
in part, from any of the following funds in such order and in | ||
such amounts as the Authority shall determine: (1) the | ||
Industrial Project Insurance Fund (if the Authority exercises | ||
its discretion under subsection (j) of Section 805-20); (2) the | ||
Illinois Agricultural Loan Guarantee Fund; or (3) the Illinois | ||
Farmer and Agribusiness Loan Guarantee Fund.
| ||
(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. 96-897, eff. 5-24-10.)
| ||
(20 ILCS 3501/830-55) | ||
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, and the | ||
Industrial Project Insurance Fund may be used to secure State | ||
Guarantees issued under this Section as provided in Section | ||
830-30, and Section 830-35, and subsection (j) of Section | ||
805-20, respectively. If the Authority exercises its | ||
discretion under subsection (j) of Section 805-20 to secure a | ||
State Guarantee with the Industrial Project Insurance Fund and | ||
also exercises its discretion under this subsection to secure | ||
the same State Guarantee with the Illinois Agricultural Loan | ||
Guarantee Fund, the Illinois Farmer and Agribusiness Loan | ||
Guarantee Fund, or both, all payments by the Authority to | ||
satisfy claims against the State Guarantee shall be made from | ||
the Industrial Project Insurance Fund, the Illinois | ||
Agricultural Loan Guarantee Fund, or the Illinois Farmer and | ||
Agribusiness Loan Guarantee Fund, as applicable, in such order | ||
and in such amounts as the Authority shall determine. | ||
(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.
| ||
(Source: P.A. 96-897, eff. 5-24-10.) | ||
(20 ILCS 3501/Art. 835 heading new) | ||
ARTICLE 835. VETERANS ASSISTANCE | ||
(20 ILCS 3501/835-5 new) | ||
Sec. 835-5. Legislative findings. The General Assembly | ||
hereby finds and declares the following: (i) that there is an | ||
inadequate supply of funds available in this State at rates | ||
sufficiently low to enable veterans to own and operate small | ||
businesses
successfully in this State; (ii) such an inadequate | ||
supply of funds makes the
transition of veterans from service | ||
in the armed forces of the United States to civilian life more | ||
difficult and results in increased unemployment of veterans and | ||
its attendant problems; (iii) that there have been recurrent | ||
shortages of funds available to small businesses owned and | ||
operated by veterans in this State from private market sources | ||
at reasonable interest rates; and (iv) that the ordinary | ||
operations of
private enterprise have not in the past corrected | ||
these conditions. | ||
(20 ILCS 3501/835-10 new) | ||
Sec. 835-10. Definitions. As used or referred to in this | ||
Article 835, the following
words and terms shall have the | ||
following meanings, except where the context clearly requires | ||
otherwise: | ||
"Fund" means one or more of the Industrial Project | ||
Insurance Fund, the
Illinois Agricultural Loan Guarantee Fund, | ||
or the Illinois Farmer and Agribusiness Loan Guarantee Fund, as | ||
applicable. | ||
"Illinois Agricultural Loan Guarantee Fund" means the | ||
Illinois Agricultural Loan Guarantee Fund created under | ||
Section 830-30(c) of this Act. | ||
"Illinois Farmer and Agribusiness Loan Guarantee Fund" | ||
means the Illinois Farmer and Agribusiness Loan Guarantee Fund | ||
created under Section 830-35(c) of this Act. | ||
"Industrial Project Insurance Fund" means the Industrial | ||
Project Insurance
Fund created under Section 805-15 of this | ||
Act. | ||
"Qualified veteran-owned small business" has the meaning | ||
provided in subsection (e) of Section 45-57 of the Illinois | ||
Procurement Code. | ||
(20 ILCS 3501/835-15 new) | ||
Sec. 835-15. Powers and duties. The Authority may enter | ||
into a State Guarantee with a lender, or a person holding a | ||
note, of a loan or loans to a qualified veteran-owned small | ||
business and may make payment, in whole or in part, on a State | ||
Guarantee from any of the following funds in such order and in | ||
such amounts as the Authority shall determine: (1) the | ||
Industrial
Project Insurance Fund (if the Authority exercises | ||
its discretion under subsection (j) of Section 805-20); (2) the | ||
Illinois Agricultural Loan Guarantee Fund; or (3) the Illinois | ||
Farmer and Agribusiness Loan Guarantee Fund. | ||
(20 ILCS 3501/835-20 new) | ||
Sec. 835-20. State Guarantees for loans to qualified | ||
veteran-owned small businesses. | ||
(a) The Authority is authorized to issue State Guarantees | ||
to lenders for loans to qualified
veteran-owned small | ||
businesses for the general corporate purposes of those | ||
qualified veteran-owned small businesses. 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, and financing statements, and any other similar fees | ||
or charges as the Authority may require. The application shall, | ||
at a minimum, contain the name, address, present credit and | ||
financial information, including
cash flow statements, | ||
financial statements, and balance sheets, of the qualified | ||
veteran-owned small business, any other 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 loan subject to a State Guarantee can be | ||
converted to a fixed interest rate at any time during the term | ||
of the loan. Any State Guarantees provided under this Section | ||
shall (i) not exceed $500,000 per qualified veteran-owned small | ||
business, (ii) not exceed a term of 15 years, and (iii) 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 qualified veteran-owned small business, 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 does 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 in | ||
this Section. | ||
(b) The Authority shall provide or renew a State Guarantee | ||
to a lender if: | ||
(1) a fee equal to 25 basis points on the loan is paid | ||
to the Authority on an annual basis by the lender; | ||
(2) the application provides collateral acceptable to | ||
the Authority that is at least equal to
the State's portion | ||
of the Guarantee to be provided; | ||
(3) the lender assumes all responsibility and costs for | ||
pursuing legal action on
collecting any loan that is | ||
delinquent or in default; and | ||
(4) the lender is responsible for the first 15% of the | ||
outstanding principal of the note for which the State | ||
Guarantee has been applied. | ||
(c) If, for any reason, the General Assembly fails to make | ||
an appropriation sufficient to
meet the obligations under a | ||
State Guarantee, 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 Industrial | ||
Project Insurance Fund, the Illinois Agricultural Loan | ||
Guarantee Fund, or the Illinois Farmer and Agribusiness Loan | ||
Guarantee Fund, or any combination of those funds, as directed | ||
by the Governor, out of the General Revenue Fund. In the event | ||
of a default by the borrower on a loan subject to a State | ||
Guarantee under this Section, Section 830-30, Section 830-35, | ||
Section 830-45, 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. Payments | ||
by the Authority to satisfy claims against the State Guarantee | ||
shall be made, in whole or in part, from any of the following | ||
funds in such order and in such amounts as the Authority shall | ||
determine: (1) the Industrial Project Insurance Fund created | ||
under Article 805 of this Act (if the Authority exercises its | ||
discretion under subsection (j) of Section 805-20); (2) the | ||
Illinois Farmer and Agribusiness Loan Guarantee Fund; or (3) | ||
the
Illinois Agricultural Loan Guarantee Fund. It shall be the | ||
responsibility of the lender to proceed with collecting and | ||
disposing of collateral on the State Guarantee under this | ||
Section within 14 months after the State Guarantee is declared | ||
delinquent. If the lender does not dispose of the collateral | ||
within that 14-month period, the lender shall be liable to | ||
repay to the State interest on the State Guarantee at a rate | ||
equal to the same rate that the lender charges on the State | ||
Guarantee, provided that the
Authority shall have the authority | ||
to extend the 14-month period for a lender in the case of | ||
bankruptcy or extenuating circumstances. The applicable fund | ||
or funds shall be reimbursed for any amounts paid under this | ||
Section, Section 830-30, Section 830-35, Section 830-45, | ||
Section 830-50, or Section 830-55 upon liquidation of the | ||
collateral. The Authority, by resolution of the Board, may | ||
borrow sums from a fund or funds and provide for repayment as | ||
soon as may be
practical upon receipt of payments of principal | ||
and interest by a borrower on loans subject to a State | ||
Guarantee under this Section, Section 830-30, Section 830-35, | ||
Section 830-45, 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 830–30, Section 830–35, Section 830-45, 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 with | ||
respect to the qualified veteran-owned small businesses and | ||
lenders who may obtain State Guarantees, the Authority
may | ||
adopt rules establishing the eligibility of qualified | ||
veteran-owned small businesses and lenders to participate in | ||
the State Guarantee program and the terms, standards, and | ||
procedures that will apply, if the Authority finds that | ||
emergency conditions in Illinois have
created the need for | ||
State Guarantees pursuant to terms, standards, and procedures | ||
other than those specified in this Section. | ||
(20 ILCS 3501/835-25 new) | ||
Sec. 835-25. Authority administrative expenses. For | ||
fiscal years 2017 through 2019, the Authority is authorized to | ||
reimburse itself for the ordinary and necessary expenses of | ||
administering the State Guarantee
program under this Article | ||
from amounts from time to time available in the Industrial | ||
Project Insurance Fund in amounts not to exceed: (1) $275,000 | ||
in fiscal year 2017; and (2) $200,000 per fiscal year in fiscal | ||
years 2018 and 2019. Ordinary and necessary expenses of | ||
administering those State Guarantee programs include, without | ||
limitation, costs of general administration, staff, accounting | ||
and auditing services, legal services, judgments, loan | ||
servicing, realization upon collateral, communications with | ||
borrowers and lenders, and similar expenses, all to the extent | ||
reasonably allocable to such State Guarantee programs. | ||
This Section is repealed on August 1, 2019.
| ||
Section 99. Effective date. This Act takes effect upon | ||
becoming law.
| ||