State of Illinois
91st General Assembly
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91_HB2034

 
                                               LRB9105498PTpk

 1        AN ACT to amend the  Illinois  Farm  Development  Act  by
 2    changing Sections 8, 12.1, 12.2, 12.4, and 12.5.

 3        Be  it  enacted  by  the People of the State of Illinois,
 4    represented in the General Assembly:

 5        Section 5.  The Illinois Farm Development Act is  amended
 6    by  changing  Sections  8,  12.1,  12.2,  12.4,  and  12.5 as
 7    follows:

 8        (20 ILCS 3605/8) (from Ch. 5, par. 1208)
 9        Sec. 8.  Bonds of the Authority.
10        (1) Source of Payment.  All Bonds issued by the Authority
11    shall be  payable  solely  out  of  the  revenues  and  other
12    receipts  of  the  Authority  as  may  be  designated  in the
13    proceedings of the Board  under  which  the  Bonds  shall  be
14    authorized to be issued.
15        (2)  Pledge   of   Revenues   and  Other  Security.   The
16    principal  of  and  interest  on  any  Bonds  issued  by  the
17    Authority shall be secured by a pledge of  the  revenues  and
18    other  receipts  out of which the same may be payable and may
19    be secured by a trust indenture evidencing such pledge or  by
20    a  foreclosable  mortgage  and  deed  of  trust  conveying as
21    security for such Bonds all or any part of  the  property  of
22    the  Authority  from  which  the  revenues  so pledged may be
23    derived.  The resolution under which the Bonds are authorized
24    to be issued or any such  trust  indenture  or  mortgage  may
25    contain   any   agreements   and  provisions  respecting  the
26    maintenance and insurance of the  property  covered  by  such
27    trust  indenture or mortgage, the use of the revenues subject
28    to  such  trust  indenture  or  mortgage,  the  creation  and
29    maintenance of special funds from such revenues, the  rights,
30    duties and remedies of the parties to any such instrument and
31    the  parties  for the benefit of whom such instrument is made
 
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 1    and the rights and remedies available in the event of default
 2    as the Board shall  deem  advisable  and  which  are  not  in
 3    conflict with the provisions of this Act.
 4        (3)  Execution.   All Bonds issued by the Authority shall
 5    be signed by its chairman or vice chairman  and  attested  by
 6    its secretary, and the seal of the Authority shall be affixed
 7    thereto,  and any interest coupons applicable to the Bonds of
 8    the Authority  shall  be  signed  by  its  chairman  or  vice
 9    chairman; provided, that a facsimile of the signature of said
10    officers  may  be printed or otherwise reproduced on any such
11    Bonds in lieu of his manually signing the  same  as  long  as
12    such  Bond is manually authenticated by a trustee or agent of
13    the Authority, a facsimile of the seal of the  Authority  may
14    be  printed or otherwise reproduced on any such Bonds in lieu
15    of being manually affixed thereto, and  a  facsimile  of  the
16    signature  of its chairman or vice chairman may be printed or
17    otherwise reproduced on any such interest coupons in lieu  of
18    his manually signing the same.
19        (4)  General  Provisions  Respecting Form, Interest Rate,
20    Maturities, Sale and Negotiability of Bonds.  Any such  Bonds
21    may  be  executed  and delivered by the Authority at any time
22    and  from  time  to  time,  shall  be  in   such   form   and
23    denominations and of such tenor and maturities, shall contain
24    such  provisions permitting or restricting redemption of such
25    Bonds  prior  to  their  maturities,   shall   contain   such
26    provisions  not inconsistent with the provisions of this Act,
27    and shall bear such rate or rates of  interest,  payable  and
28    evidenced in such manner, as may be provided by resolution of
29    its  Board.   Bonds of the Authority may be sold at public or
30    private sale, at such price or prices and  at  such  time  as
31    determined by the Board of Directors to be advantageous.
32        The   Authority   may  pay  all  expenses,  premiums  and
33    commissions in connection with any financing done by it.
34        (5)  Nature of Obligation and Source of Payment.   Except
 
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 1    as  specified  in  Sections 12.1, and 12.2, 12.4, and 12.5 of
 2    this Act with respect to State  Guarantees,  all  obligations
 3    created and all Bonds issued by the Authority shall be solely
 4    and  exclusively an obligation of the Authority and shall not
 5    create an obligation or debt of the State or a charge on  its
 6    credit  or  taxing powers.  Any Bonds issued by the Authority
 7    shall be limited or  special  obligations  of  the  Authority
 8    payable  solely out of the revenues and other receipts of the
 9    Authority specified  in  the  proceedings  authorizing  those
10    Bonds.  Nothing in this paragraph shall be deemed to prohibit
11    the  granting  of "State Guarantees" as defined in subsection
12    (k) of Section 2 and authorized by Sections Section 12.1, and
13    Section 12.2, 12.4, and 12.5 of this Act.
14        (6)  Resolution Authorizing Bonds.  The Authority may not
15    pass a resolution authorizing the issuance of  any  notes  or
16    bonds in excess of $250,000 for any one real estate borrower.
17    No  proceeds  from any bonds issued by the Authority shall be
18    loaned to any natural person who has a net worth in excess of
19    $500,000 for the purchase  of  new  depreciable  agricultural
20    property   or   to   any  agribusiness  that,  including  all
21    affiliates and subsidiaries, has more than 100 employees  and
22    a   gross  income  exceeding  $2,000,000  for  the  preceding
23    calendar year; provided, however, that the employee size  and
24    gross  income  limitations  shall  not  apply to any loans to
25    agribusinesses for research  and  development  purposes,  and
26    provided further that the Authority shall retain the power to
27    waive such limitations for any agribusiness that, at the time
28    of  application,  does  not  operate  a  facility within this
29    State.  Resolutions of the Authority authorizing the issuance
30    of any notes or bonds or any issue thereof under this Act may
31    provide for:
32        (a)  Pledging all or any part of  the  fees  and  charges
33    made or received by the Authority, and all or any part of the
34    moneys  received  in  payment  of any loans, notes, bonds, or
 
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 1    other evidences of indebtedness and other moneys received  or
 2    to be received by the Authority, to secure the payment of the
 3    notes  or  bonds or of any issue thereof, and subject to such
 4    agreements with bondholders or noteholders as may then exist;
 5        (b)  Pledging all or any  part  of  the  revenue  of  the
 6    Authority,  including  payments  or  income  from  any loans,
 7    notes, bonds, or other evidences  of  indebtedness  owned  or
 8    held  by the Authority, to secure the payment of the notes or
 9    bonds issued under this Act or of any issue of such notes  or
10    bonds,   subject  to  such  agreements  with  noteholders  or
11    bondholders as may then exist;
12        (c)  Pledging of any loan, grant,  or  contribution  from
13    the federal, State, or local government, if authorized by the
14    terms of such loan, grant, or contribution;
15        (d)  The  use  and  disposition  of the gross income from
16    mortgage loans owned by the  Authority  and  payment  of  the
17    principal of mortgage loans owned by the Authority;
18        (e)  The  setting  aside of reserves or sinking funds and
19    the regulation and disposition thereof;
20        (f)  Limitations on the purpose to which the proceeds  of
21    sale  of  notes  or  bonds  may  be applied and pledging such
22    proceeds to secure the payment of the notes or  bonds  or  of
23    any issue thereof;
24        (g)  Limitations  on  the issuance of additional notes or
25    bonds; the terms upon which additional notes or bonds may  be
26    issued and secured; and the refunding of outstanding or other
27    notes or bonds;
28        (h)  The procedure, if any, by which  the  terms  of  any
29    contract  with  noteholders  or bondholders may be amended or
30    abrogated, the amount of notes or bonds the holders of  which
31    must  consent  thereto,  and the manner in which such consent
32    may be given;
33        (i)  Vesting in a  trustee  or  trustees  such  property,
34    rights,  power  and  duties  in  trust  as  the Authority may
 
                            -5-                LRB9105498PTpk
 1    determine, which may include any or all of the rights, powers
 2    and duties  of  the  trustee  appointed  by  the  bondholders
 3    pursuant  to this Act and limiting or abrogating the right of
 4    the bondholders to appoint a trustee or limiting the  rights,
 5    powers and duties of such trustee;
 6        (j)  Any  other  matter,  of like or different character,
 7    which in any way affect the security  or  protection  of  the
 8    notes or bonds issued by the Authority.
 9        (7)  Refunding  Bonds.  Any bonds issued by the Authority
10    may from time to time be refunded by the issuance, by sale or
11    exchange,  of  refunding  Bonds  payable  from  the  same  or
12    different sources for the purpose of paying all or  any  part
13    of  the principal of the Bonds to be refunded, any redemption
14    premium required to be paid as a condition to the  redemption
15    prior  to  maturity  of  any  such  Bonds  that  are to be so
16    redeemed in connection with such refunding, any  accrued  and
17    unpaid  interest on the Bonds to be refunded, any interest to
18    accrue on each Bond to be refunded to the date on which it is
19    to be paid, whether at maturity or  by  redemption  prior  to
20    maturity,  and  the  expense incurred in connection with such
21    refunding; provided, that unless duly called  for  redemption
22    pursuant  to provisions contained therein, the holders of any
23    such bonds then outstanding and proposed to be refunded shall
24    not be compelled without their  consent  to  surrender  their
25    outstanding  Bonds  for  such refunding.  Any refunding Bonds
26    may be sold by the Authority at public  or  private  sale  at
27    such  price  or  prices  as may be exchanged for the Bonds or
28    other obligations to be refunded.  Any refunding Bonds issued
29    by an Authority  shall  be  issued  and  may  be  secured  in
30    accordance with the provisions of Section 6 of this Act.
31    (Source: P.A. 85-916; 85-952.)

32        (20 ILCS 3605/12.1) (from Ch. 5, par. 1212.1)
33        Sec. 12.1.  State Guarantees for existing debt.
 
                            -6-                LRB9105498PTpk
 1        (a)  The   Authority   is   authorized   to  issue  State
 2    Guarantees for farmers' existing debts held by a lender.  For
 3    the purposes of this Section, a farmer shall be a resident of
 4    Illinois,  who  is a principal operator of a farm or land, at
 5    least 50% of  whose  annual  gross  income  is  derived  from
 6    farming  and whose debt to asset ratio shall not be less than
 7    40%, except in those cases where the applicant has previously
 8    used the guarantee program there shall be no  debt  to  asset
 9    ratio  or  income  restriction.   For  the  purposes  of this
10    Section,  debt  to  asset  ratio  shall  mean   the   current
11    outstanding  liabilities of the farmer divided by the current
12    outstanding  assets  of  the  farmer.   The  Authority  shall
13    establish the maximum permissible debt to asset  ratio  based
14    on criteria established by the Authority.
15        Lenders  shall  apply  for  the State Guarantees on forms
16    provided by the Authority and certify  that  the  application
17    and  any other documents submitted are true and correct.  The
18    lender or borrower, or both  in  combination,  shall  pay  an
19    administrative  fee  as  determined  by  the  Authority.  The
20    applicant shall be responsible for paying any fees or charges
21    involved  in   recording   mortgages,   releases,   financing
22    statements,  insurance  for  secondary  market issues and any
23    other similar fees or charges as the Authority  may  require.
24    The application shall at a minimum contain the farmer's name,
25    address,  present credit and financial information, including
26    cash flow statements, financial statements,  balance  sheets,
27    and  any  other information pertinent to the application, and
28    the collateral to be used to secure the State Guarantee.   In
29    addition, the lender must agree to bring the farmer's debt to
30    a  current status at the time the State Guarantee is provided
31    and must also agree to charge a fixed or adjustable  interest
32    rate  which  the  Authority determines to be below the market
33    rate of interest generally available  to  the  borrower.   If
34    both the lender and applicant agree, the interest rate on the
 
                            -7-                LRB9105498PTpk
 1    State  Guarantee  Loan  can  be converted to a fixed interest
 2    rate at any time during the term of the loan.
 3        Any State Guarantees  provided  under  this  Section  (i)
 4    shall not exceed $500,000 per farmer, (ii) shall be set up on
 5    a  payment  schedule  not to exceed 30 years, and shall be no
 6    longer than 30 years in duration, and (iii) shall be  subject
 7    to  an  annual  review  and  renewal  by  the  lender and the
 8    Authority; provided that only one such State Guarantee  shall
 9    be  outstanding  per  farmer  at  any  one  time.   No  State
10    Guarantee  shall be revoked by the Authority without a 90 day
11    notice, in writing, to all parties.  In those cases were  the
12    borrower  has  not previously used the guarantee program, the
13    lender shall not call due any loan during the first  3  years
14    for any reason except for lack of performance or insufficient
15    collateral.  The  lender  can review and withdraw or continue
16    with the State Guarantee on an annual basis after the first 3
17    years of the loan, provided a 90 day notice, in  writing,  to
18    all parties has been given.
19        (b)  The   Authority  shall  provide  or  renew  a  State
20    Guarantee to a lender if:
21             (i)  A fee equal to 25 basis points on the  loan  is
22        paid to the Authority on an annual basis by the lender.
23             (ii)  The application provides collateral acceptable
24        to  the  Authority  that is at least equal to the State's
25        portion of the Guarantee to be provided.
26             (iii)  The lender  assumes  all  responsibility  and
27        costs  for  pursuing  legal action on collecting any loan
28        that is delinquent or in default.
29             (iv)  The lender is responsible for the first 15% of
30        the outstanding principal of the note for which the State
31        Guarantee has been applied.
32        (c)  There  is  hereby  created  outside  of  the   State
33    Treasury   a  special  fund  to  be  known  as  the  Illinois
34    Agricultural Loan Guarantee Fund.  The State Treasurer  shall
 
                            -8-                LRB9105498PTpk
 1    be  custodian  of  this  Fund.   Any  amounts in the Illinois
 2    Agricultural Loan Guarantee Fund not currently needed to meet
 3    the obligations of the Fund shall be invested as provided  by
 4    law,  and all interest earned from these investments shall be
 5    deposited into the Fund until the Fund  reaches  the  maximum
 6    amount   authorized   established   in   this   Act  Section;
 7    thereafter, interest  earned  shall  be  deposited  into  the
 8    General   Revenue  Fund.  After  September  1,  1989,  annual
 9    investment earnings equal to 1.5% of the Fund shall remain in
10    the Fund to be used for the purposes established  in  Section
11    12.3 of this Act.
12        The  Authority  is  authorized  to  transfer no more than
13    $45,000,000 to the Fund such  amounts  as  are  necessary  to
14    satisfy  claims  during  the  duration of the State Guarantee
15    program to secure State Guarantees issued under this Section
16    and the State shall not be liable for more  than  $45,000,000
17    to  secure State Guarantees issued under this Section. If for
18    any  reason  the  General   Assembly   fails   to   make   an
19    appropriation  sufficient to meet these obligations, this Act
20    shall constitute an irrevocable and continuing  appropriation
21    of an amount necessary to secure guarantees as defaults occur
22    up   to  an  amount  equal  to  the  difference  between  the
23    $45,000,000 obligation and all amounts previously transferred
24    to the Illinois Agricultural Loan Guarantee    Fund  and  the
25    irrevocable  and  continuing authority for, and direction to,
26    the State Treasurer and the Comptroller to make the necessary
27    transfers to the Illinois Agricultural Loan  Guarantee  Fund,
28    as directed by the Governor, out of the General Revenue Fund.
29    Any  amounts  transferred from the Illinois Agricultural Loan
30    Guarantee Fund to the  General  Revenue  Fund,  under  powers
31    granted  to  the  Governor  by Public Act 87-14, shall not be
32    considered in determining if the maximum of  $45,000,000  has
33    been   transferred   into   the  Illinois  Agricultural  Loan
34    Guarantee Fund.
 
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 1        Within 30 days after November 15, 1985, the Authority may
 2    transfer up to $7,000,000 from available appropriations  into
 3    the   Illinois  Agricultural  Loan  Guarantee  Fund  for  the
 4    purposes of this Act.  Thereafter, the Authority may transfer
 5    additional  amounts  into  the  Illinois  Agricultural   Loan
 6    Guarantee  Fund to secure guarantees for defaults as defaults
 7    occur.
 8        In the event of default by the farmer, the  lender  shall
 9    be  entitled  to,  and the Authority shall direct payment on,
10    the State  Guarantee  after  90  days  of  delinquency.   All
11    payments  by  the  Authority  shall be made from the Illinois
12    Agricultural Loan Guarantee Fund to  satisfy  claims  against
13    the   State   Guarantee.    The  Illinois  Agricultural  Loan
14    Guarantee Fund shall guarantee receipt of payment of the  85%
15    of  the  principal  and  interest owed on the State Guarantee
16    Loan by the farmer to the guarantee holder.
17        It shall be the responsibility of the lender  to  proceed
18    with  the collecting and disposing of collateral on the State
19    Guarantee within 14 months of the time the State Guarantee is
20    declared delinquent; provided, however, that the lender shall
21    not collect or dispose of collateral on the  State  Guarantee
22    without  the express written prior approval of the Authority.
23    If the lender does not dispose of the  collateral  within  14
24    months,  the  lender  shall  be  liable to repay to the State
25    interest on the State Guarantee equal to the same rate  which
26    the lender charges on the State Guarantee; provided, however,
27    that  the  Authority  may  extend  the  14 month period for a
28    lender   in   the   case   of   bankruptcy   or   extenuating
29    circumstances. The Fund shall be reimbursed for  any  amounts
30    paid  under  this Section upon liquidation of the collateral.
31    The Authority, by resolution of the Board,  may  borrow  sums
32    from  the  Fund  and  provide for repayment as soon as may be
33    practical upon receipt of payments of principal and  interest
34    by  a  farmer.  Money  may  be  borrowed from the Fund by the
 
                            -10-               LRB9105498PTpk
 1    Authority for the sole purpose  of  paying  certain  interest
 2    costs for farmers associated with selling a loan subject to a
 3    State  Guarantee  in  a  secondary  market  as  may be deemed
 4    reasonable and necessary by the Authority.
 5        (d)  Notwithstanding the provisions of this Section  12.1
 6    with  respect to the farmers and lenders who may obtain State
 7    Guarantees, the Authority may promulgate  rules  establishing
 8    the  eligibility of farmers and lenders to participate in the
 9    State  guarantee  program  and  the  terms,  standards,   and
10    procedures  that  will  apply,  when the Authority finds that
11    emergency conditions in Illinois agriculture have created the
12    need for State Guarantees pursuant to terms,  standards,  and
13    procedures other than those specified in this Section.
14    (Source: P.A. 89-154, eff. 7-19-95; 90-325, eff. 8-8-97.)

15        (20 ILCS 3605/12.2) (from Ch. 5, par. 1212.2)
16        Sec.  12.2.  State  Guarantees  for  loans to farmers and
17    agribusiness; eligibility.
18        (a)  The  Authority  is   authorized   to   issue   State
19    Guarantees  to  lenders  for  loans  to  eligible farmers and
20    agribusinesses for purposes set forth in  this  Section.  For
21    purposes  of  this  Section,  an  eligible  farmer shall be a
22    resident of Illinois (i) who is principal operator of a  farm
23    or land, at least 50% of whose annual gross income is derived
24    from  farming,  (ii) whose annual total sales of agricultural
25    products, commodities,  or  livestock  exceeds  $20,000,  and
26    (iii)  whose  net worth does not exceed $500,000. An eligible
27    agribusiness shall be that as defined in Section  2  of  this
28    Act.
29        The  Authority  may  approve  applications by farmers and
30    agribusinesses  that  promote  diversification  of  the  farm
31    economy of this State through the growth and  development  of
32    new  crops  or livestock not customarily grown or produced in
33    this State or that emphasize a vertical integration of  grain
 
                            -11-               LRB9105498PTpk
 1    or livestock produced or raised in this State into a finished
 2    agricultural  product  for consumption or use.  "New crops or
 3    livestock not customarily grown or produced  in  this  State"
 4    shall  not  include  corn, soybeans, wheat, swine, or beef or
 5    dairy cattle. "Vertical integration  of  grain  or  livestock
 6    produced  or  raised  in this State" shall include any new or
 7    existing grain or livestock grown or produced in this State.
 8        Lenders shall apply for the  State  Guarantees  on  forms
 9    provided  by  the Authority, certify that the application and
10    any other documents submitted are true and correct,  and  pay
11    an  administrative  fee  as determined by the Authority.  The
12    applicant shall be responsible for paying any fees or charges
13    involved  in   recording   mortgages,   releases,   financing
14    statements,  insurance  for  secondary  market issues and any
15    other similar fees or charges as the Authority  may  require.
16    The  application  shall  at a minimum contain the farmer's or
17    agribusiness' name, address,  present  credit  and  financial
18    information,   including   cash  flow  statements,  financial
19    statements,  balance  sheets,  and  any   other   information
20    pertinent  to  the application, and the collateral to be used
21    to secure the State Guarantee.  In addition, the lender  must
22    agree to charge an interest rate, which may vary, on the loan
23    that  the Authority determines to be below the market rate of
24    interest generally available to the  borrower.  If  both  the
25    lender  and  applicant  agree, the interest rate on the State
26    Guarantee Loan can be converted to a fixed interest  rate  at
27    any time during the term of the loan.
28        Any  State  Guarantees  provided  under  this Section (i)
29    shall  not  exceed  $500,000  per  farmer  or  an  amount  as
30    determined by the Authority on a case-by-case  basis  for  an
31    agribusiness,  (ii)  shall not exceed a term of 15 years, and
32    (iii) shall be subject to an annual review and renewal by the
33    lender and the Authority; provided that only one  such  State
34    Guarantee  shall  be  made per farmer or agribusiness, except
 
                            -12-               LRB9105498PTpk
 1    that additional State Guarantees may be made for purposes  of
 2    expansion of projects financed in part by a previously issued
 3    State  Guarantee.  No State Guarantee shall be revoked by the
 4    Authority without  a  90  day  notice,  in  writing,  to  all
 5    parties.   The  lender  shall  not  call due any loan for any
 6    reason  except  for   lack   of   performance,   insufficient
 7    collateral, or maturity.  A lender may review and withdraw or
 8    continue  with a State Guarantee on an annual basis after the
 9    first 5 years following closing of the  loan  application  if
10    the  loan  contract  provides for an interest rate that shall
11    not vary.  A lender shall not withdraw a State  Guarantee  if
12    the  loan  contract  provides  for  an interest rate that may
13    vary, except for reasons set forth herein.
14        (b)  The  Authority  shall  provide  or  renew  a   State
15    Guarantee to a lender if:
16             i.  A  fee  equal  to 25 basis points on the loan is
17        paid to the Authority on an annual basis by the lender.
18             ii.  The application provides collateral  acceptable
19        to  the  Authority  that is at least equal to the State's
20        portion of the Guarantee to be provided.
21             iii.  The  lender  assumes  all  responsibility  and
22        costs for pursuing legal action on  collecting  any  loan
23        that is delinquent or in default.
24             iv.  The  lender is responsible for the first 15% of
25        the outstanding principal of the note for which the State
26        Guarantee has been applied.
27        (c)  There  is  hereby  created  outside  of  the   State
28    Treasury  a  special  fund to be known as the Illinois Farmer
29    and Agribusiness Loan Guarantee Fund.   The  State  Treasurer
30    shall be custodian of this Fund.  Any amounts in the Fund not
31    currently needed to meet the obligations of the Fund shall be
32    invested  as  provided  by  law, and all interest earned from
33    these investments shall be deposited into the Fund until  the
34    Fund  reaches  the  maximum amounts authorized established in
 
                            -13-               LRB9105498PTpk
 1    this  Act  Section;  thereafter,  interest  earned  shall  be
 2    deposited into the General Revenue Fund. After  September  1,
 3    1989,  annual  investment  earnings equal to 1.5% of the Fund
 4    shall remain  in  the  Fund  to  be  used  for  the  purposes
 5    established in Section 12.3 of this Act.
 6        The  Authority  is authorized to transfer such amounts as
 7    are necessary to satisfy  claims  an  amount  not  to  exceed
 8    $15,000,000  from  available  appropriations  and  from  fund
 9    balances  of the Farm Emergency Assistance Fund as of June 30
10    of each year to the Illinois  Farmer  and  Agribusiness  Loan
11    Guarantee  Fund  to secure State Guarantees issued under this
12    Section and Sections Section 12.4  and  12.5  and  the  State
13    shall not be liable for more than $15,000,000 to secure State
14    Guarantees issued under this Section and Section 12.4. If for
15    any   reason   the   General   Assembly   fails  to  make  an
16    appropriation sufficient to meet these obligations, this  Act
17    shall  constitute an irrevocable and continuing appropriation
18    of an amount necessary to secure guarantees as defaults occur
19    up  to  an  amount  equal  to  the  difference  between   the
20    $15,000,000 obligation and all amounts previously transferred
21    to  the  Illinois Farmer and Agribusiness Loan Guarantee Fund
22    and  the  irrevocable  and  continuing  authority  for,   and
23    direction to, the State Treasurer and the Comptroller to make
24    the   necessary   transfers   to   the  Illinois  Farmer  and
25    Agribusiness  Loan  Guarantee  Fund,  as  directed   by   the
26    Governor, out of the General Revenue Fund.
27        In  the  event  of  default  by  the  borrower  farmer or
28    agribusiness on State Guarantee Loans under this Section,  or
29    Section  12.4,  or Section 12.5, the lender shall be entitled
30    to, and the Authority shall  direct  payment  on,  the  State
31    Guarantee  after 90 days of delinquency.  All payments by the
32    Authority  shall  be  made  from  the  Illinois  Farmer   and
33    Agribusiness  Loan  Guarantee  Fund to satisfy claims against
34    the State Guarantee.
 
                            -14-               LRB9105498PTpk
 1        It shall be the responsibility of the lender  to  proceed
 2    with  the collecting and disposing of collateral on the State
 3    Guarantee under this Section, or  Section  12.4,  or  Section
 4    12.5  within  14  months  of  the time the State Guarantee is
 5    declared delinquent.  If the lender does not dispose  of  the
 6    collateral  within  14  months, the lender shall be liable to
 7    repay to the State interest on the State Guarantee  equal  to
 8    the same rate that the lender charges on the State Guarantee,
 9    provided  that  the  Authority  shall  have  the authority to
10    extend the 14 month period  for  a  lender  in  the  case  of
11    bankruptcy  or  extenuating  circumstances. The Fund shall be
12    reimbursed for any amounts paid under this  Section,  Section
13    12.4, or Section 12.5 upon liquidation of the collateral.
14        The  Authority,  by  resolution  of the Board, may borrow
15    sums from the Fund and provide for repayment as soon  as  may
16    be  practical  upon  receipt  of  payments  of  principal and
17    interest by  a  borrower  farmer  or  agribusiness  on  State
18    Guarantee  Loans  under  this  Section,  or  Section 12.4, or
19    Section 12.5. Money may be borrowed  from  the  Fund  by  the
20    Authority  for  the  sole  purpose of paying certain interest
21    costs for borrowers farmers or agribusinesses associated with
22    selling a loan  subject  to  a  State  Guarantee  under  this
23    Section,  or  Section  12.4,  or  Section 12.5 in a secondary
24    market as may be  deemed  reasonable  and  necessary  by  the
25    Authority.
26        (d)  Notwithstanding  the provisions of this Section 12.2
27    with respect to the farmers, agribusinesses, and lenders  who
28    may  obtain  State  Guarantees,  the Authority may promulgate
29    rules    establishing    the    eligibility    of    farmers,
30    agribusinesses, and  lenders  to  participate  in  the  State
31    Guarantee  program  and  the terms, standards, and procedures
32    that will apply, when  the  Authority  finds  that  emergency
33    conditions  in Illinois agriculture have created the need for
34    State Guarantees pursuant to terms, standards, and procedures
 
                            -15-               LRB9105498PTpk
 1    other than those specified in this Section.
 2    (Source: P.A. 90-325, eff. 8-8-97.)

 3        (20 ILCS 3605/12.4) (from Ch. 5, par. 1212.4)
 4        Sec. 12.4.  Young Farmer Loan Guarantee Program.
 5        (a)  The  Authority  is   authorized   to   issue   State
 6    Guarantees to lenders for loans to finance or refinance debts
 7    of  young farmers.  For the purposes of this Section, a young
 8    farmer is a resident of Illinois who is at least 18 years  of
 9    age  and  who  is a principal operator of a farm or land, who
10    derives at least 50% of annual  gross  income  from  farming,
11    whose  net  worth  is not less than $10,000 and whose debt to
12    asset ratio is not less than 40%. For the  purposes  of  this
13    Section,  debt  to  asset  ratio  means  current  outstanding
14    liabilities,  including any debt to be financed or refinanced
15    under this Section, divided by  current  outstanding  assets.
16    The Authority shall establish the maximum permissible debt to
17    asset ratio based on criteria established by the Authority.
18        Lenders  shall  apply  for  the State Guarantees on forms
19    provided by the Authority and certify  that  the  application
20    and  any other documents submitted are true and correct.  The
21    lender or borrower, or both  in  combination,  shall  pay  an
22    administrative  fee  as  determined  by  the  Authority.  The
23    applicant shall be responsible for paying any fee  or  charge
24    involved   in   recording   mortgages,   releases,  financing
25    statements, insurance for secondary market  issues,  and  any
26    other  similar  fee or charge that the Authority may require.
27    The application shall at a minimum contain the young farmer's
28    name, address,  present  credit  and  financial  information,
29    including cash flow statements, financial statements, balance
30    sheets,   and   any   other   information  pertinent  to  the
31    application, and the collateral to  be  used  to  secure  the
32    State  Guarantee.   In addition, the borrower must certify to
33    the Authority that,  at  the  time  the  State  Guarantee  is
 
                            -16-               LRB9105498PTpk
 1    provided,   the  borrower  will  not  be  delinquent  in  the
 2    repayment of any debt.  The lender must  agree  to  charge  a
 3    fixed   or   adjustable  interest  rate  that  the  Authority
 4    determines to be below the market rate of interest  generally
 5    available  to the borrower.  If both the lender and applicant
 6    agree, the interest rate on the State guaranteed loan can  be
 7    converted  to  a  fixed  interest rate at any time during the
 8    term of the loan.
 9        State Guarantees provided under this  Section  (i)  shall
10    not exceed $500,000 per young farmer, (ii) shall be set up on
11    a  payment  schedule  not to exceed 30 years, but shall be no
12    longer than 15 years in duration, and (iii) shall be  subject
13    to  an  annual  review  and  renewal  by  the  lender and the
14    Authority. A young farmer may use this program more than once
15    provided the aggregate principal amount of  State  Guarantees
16    under  this  Section  to  that  young  farmer does not exceed
17    $500,000.   No  State  Guarantee  shall  be  revoked  by  the
18    Authority without  a  90  day  notice,  in  writing,  to  all
19    parties.
20        (b)  The   Authority  shall  provide  or  renew  a  State
21    Guarantee to a lender if:
22             (i)  The lender pays a fee equal to 25 basis  points
23        on the loan to the Authority on an annual basis.
24             (ii)  The application provides collateral acceptable
25        to  the  Authority  that  is  at least equal to the State
26        Guarantee.
27             (iii)  The lender  assumes  all  responsibility  and
28        costs  for  pursuing  legal action on collecting any loan
29        that is delinquent or in default.
30             (iv)  The lender is at risk for the first 15% of the
31        outstanding principal of the note  for  which  the  State
32        Guarantee is provided.
33        (c)  The  Illinois Farmer and Agribusiness Loan Guarantee
34    Fund may be used to secure State Guarantees issued under this
 
                            -17-               LRB9105498PTpk
 1    Section as provided in Section 12.2.
 2        (d)  Notwithstanding the provisions of this Section  12.4
 3    with  respect to the young farmers and lenders who may obtain
 4    State  Guarantees,  the  Authority   may   promulgate   rules
 5    establishing  the eligibility of young farmers and lenders to
 6    participate in the State Guarantee  program  and  the  terms,
 7    standards, and procedures that will apply, when the Authority
 8    finds  that emergency conditions in Illinois agriculture have
 9    created the need for  State  Guarantees  pursuant  to  terms,
10    standards,  and procedures other than those specified in this
11    Section.
12    (Source: P.A. 89-154, eff. 7-19-95; 90-325, eff. 8-8-97.)

13        (20 ILCS 3605/12.5)
14        Sec. 12.5.  Specialized Livestock Guarantee Program.
15        (a)  The  Authority  is   authorized   to   issue   State
16    Guarantees to lenders for loans to finance or refinance debts
17    for  specialized  livestock  operations  that  are or will be
18    located  in  Illinois.   For  purposes  of  this  Section,  a
19    "specialized  livestock  operation"  includes,  but  is   not
20    limited to, dairy, beef, and swine enterprises.
21        (b)  Lenders  shall  apply  for  the  State Guarantees on
22    forms  provided  by  the  Authority  and  certify  that   the
23    application  and  any  other documents submitted are true and
24    correct.  The lender or borrower,  or  both  in  combination,
25    shall   pay  an  administrative  fee  as  determined  by  the
26    Authority.  The applicant shall be responsible for paying any
27    fee or charge  involved  in  recording  mortgages,  releases,
28    financing  statements, insurance for secondary market issues,
29    and any other similar fee or charge that  the  Authority  may
30    require.   The  application  shall, at a minimum, contain the
31    farmer's  name,  address,  present   credit   and   financial
32    information,   including   cash  flow  statements,  financial
33    statements,  balance  sheets,  and  any   other   information
 
                            -18-               LRB9105498PTpk
 1    pertinent  to  the application, and the collateral to be used
 2    to secure the State Guarantee.   In  addition,  the  borrower
 3    must  certify  to  the  Authority that, at the time the State
 4    Guarantee is provided, the borrower will not be delinquent in
 5    the repayment of any debt.  The lender must agree to charge a
 6    fixed  or  adjustable  interest  rate  that   the   Authority
 7    determines  to be below the market rate of interest generally
 8    available to the borrower.  If both the lender and  applicant
 9    agree,  the interest rate on the State guaranteed loan can be
10    converted to a fixed interest rate at  any  time  during  the
11    term of the loan.
12        (c)  State  Guarantees  provided  under  this Section (i)
13    shall not exceed $1,000,000 per applicant, (ii) shall  be  no
14    longer  than 15 years in duration, and (iii) shall be subject
15    to  an  annual  review  and  renewal  by  the  lender and the
16    Authority. An applicant may use this program more than  once,
17    provided   that  the  aggregate  principal  amount  of  State
18    Guarantees under this Section  to  that  applicant  does  not
19    exceed $1,000,000.  A State Guarantee shall not be revoked by
20    the  Authority  without  a  90-day notice, in writing, to all
21    parties.
22        (d)  The  Authority  shall  provide  or  renew  a   State
23    Guarantee to a lender if:
24             (i)  The  lender pays a fee equal to 25 basis points
25        on the loan to the Authority on an annual basis.
26             (ii)  The application provides collateral acceptable
27        to the Authority that is at  least  equal  to  the  State
28        Guarantee.
29             (iii)  The  lender  assumes  all  responsibility and
30        costs for pursuing legal action on  collecting  any  loan
31        that is delinquent or in default.
32             (iv)  The lender is at risk for the first 15% of the
33        outstanding  principal  of  the  note for which the State
34        Guarantee is provided.
 
                            -19-               LRB9105498PTpk
 1        (e)  The Illinois Farmer and Agribusiness Loan  Guarantee
 2    Fund may be used to secure State Guarantees issued under this
 3    Section as provided in Section 12.2.
 4        (f)  Notwithstanding  the provisions of this Section 12.5
 5    with respect to  the  specialized  livestock  operations  and
 6    lenders  who  may  obtain State Guarantees, the Authority may
 7    promulgate rules establishing the eligibility of  specialized
 8    livestock  operations and lenders to participate in the State
 9    Guarantee program and the terms,  standards,  and  procedures
10    that  will  apply,  when  the  Authority finds that emergency
11    conditions in Illinois agriculture have created the need  for
12    State Guarantees pursuant to terms, standards, and procedures
13    other than those specified in this Section.
14    (Source: P.A. 89-527, eff. 7-19-96.)

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