State of Illinois
91st General Assembly
Legislation

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91_SB0428

 
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 1    AN  ACT  to amend the Illinois Farm Development Authority Act
 2    by adding Section 12.6.

 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 Authority Act is
 6    amended by adding Section 12.6 as follows:

 7        (20 ILCS 3605/12.6 new)
 8        Sec.  12.6.  Enhanced  Value-Added Agriculture Production
 9    Guarantee Program.
10        (a) The Authority may issue State Guarantees  to  lenders
11    for  loans  to  finance  or  refinance  debts for specialized
12    agribusiness's that are or will be (i) engaged in the process
13    of adding value to agricultural products and (ii) located  in
14    Illinois.   For  the  purposes  of this Section, agribusiness
15    includes, but is not limited to, the operation  of  research,
16    development,  processing, marketing, production, and the sale
17    of agricultural products and production agriculture.
18        (b) Lenders must apply for the State Guarantees on  forms
19    provided   by   the  Authority  and  must  certify  that  the
20    application  and  any  other  documents  submitted   to   the
21    Authority  are  true and correct.  The lender or borrower, or
22    both  in  combination,  must  pay   an   administrative   fee
23    determined  by  the  Authority.  The applicant is responsible
24    for paying any fee or charge involved in recording mortgages,
25    releases, financing statement, insurance for secondary market
26    issues,  and  any  other  similar  fee  or  charge  that  the
27    Authority may require.   The application must, at a  minimum,
28    contain  the  farmer's  name;  address;  present  credit  and
29    financial   information,   including  cash  flow  statements,
30    financial  statements,  balance   sheets,   and   any   other
31    information  pertinent to the application; and the collateral
 
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 1    to be used to secure the State Guarantee.  In  addition,  the
 2    borrower  must certify to the Authority that, at the time the
 3    State  Guarantee  is  provided,  the  borrower  will  not  be
 4    delinquent in the repayment of any  debt.   The  lender  must
 5    agree to charge a fixed or adjustable rate that the Authority
 6    determines  is  below  the  market rate of interest generally
 7    available to  the  borrower.  If  both  the  lender  and  the
 8    borrower  agree,  the  interest  rate on the State guaranteed
 9    loan can be converted to a fixed interest rate  at  any  time
10    during the term of the loan.
11        (c)  State Guarantees provided under this Section (i) may
12    not exceed $1,000,000 per applicant, (ii) may not  be  longer
13    than 15 years in duration, and (iii) are subject to an annual
14    review  and  renewal  by  the  lender  and the Authority.  An
15    applicant may use this program more than once, provided  that
16    the aggregate principal amount to State Guarantees under this
17    Section to the applicant does not exceed $1,000,000.  A State
18    Guarantee  may  not  be  revoked  by  the Authority without a
19    90-day notice, in writing, to all parties.
20        (d) The Authority must provide or renew a State Guarantee
21    to a lender if:
22             (1) The lender pays a fee equal to 25  basis  points
23        on the loan to the Authority on an annual basis.
24             (2)  The  application provides collateral acceptable
25        to the Authority that is at  least  equal  to  the  State
26        Guarantee.
27             (3)  The lender assumes all responsibility and costs
28        for pursuing legal action on collecting any loan that  is
29        delinquent or in default.
30             (4)  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        (e)  The  Illinois Farmer and Agribusiness Loan Guarantee
34    Fund may be used to secure the State Guarantees issued  under
 
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 1    this Section.

 2        Section  99.  Effective date.  This Act takes effect upon
 3    becoming law.

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