Section 15.10  Purpose

 

This Part establishes the requirements and procedures to be followed when the Illinois Department of Transportation, Division of Aeronautics, lends money to public airport owners from the Airport Land Loan Revolving Fund for the purpose of acquiring real estate interests needed to improve publicly owned airports or to protect the public's interest in, and safety at, such airports.  [620 ILCS 5/34b(a)]

 

Section 15.20  Definitions

 

As used in this Part:

 

"Act" means the Illinois Aeronautics Act [620 ILCS 5/34b].

 

"Airport Land Loan Revolving Fund" is a special State fund, created pursuant to Section 8.36 of the State Finance Act [30 ILCS 105/8.36], in the State Treasury from which appropriations for loans to public airport owners may be made by the Department of Transportation pursuant to Section 34b of the Illinois Aeronautics Act [620 ILCS 5/34b].

 

"Airport Layout Plan (ALP)" means a schematic showing the size and location of all runways, taxiways, and other pertinent features of a publicly owned airport that may affect the movement of aircraft.  An airport layout plan is developed according to the Federal Aviation Administration's (the FAA's) Advisory Circular 150/5300-13, "Airport Design Manual" and must be approved by the Department.

 

"Department" means the Illinois Department of Transportation.

 

"Division" means the Illinois Department of Transportation, Division of Aeronautics.

 

"FAA" means the United States Department of Transportation, Federal Aviation Administration.

 

"Part" means the regulations contained in this document promulgated to implement the Airport Land Loan Program and located at 92 Ill. Adm. Code 15.

 

"Property" means the interest in real estate that is to be purchased, in whole or in part, with money borrowed under this Part.  This term includes property interests less than fee simple ownership, such as easements.

 

"Public Airport Owner (the Owner)" means an agency or political subdivision of the State of Illinois that owns and operates a public airport. This term may include, but is not necessarily limited to, counties, municipalities, park districts, airport authorities, universities, and port districts.

 

Section 15.30  Airport Eligibility

 

The Department may make a loan to an Owner subject to the following conditions and in compliance with this Part:

 

a)         the airport must be publicly owned;

 

b)         the airport must have been in operation as of January 1, 1999 (Section 34b(a)(1) of the Act);

 

c)         the Owner must have current height restrictive zoning for the public airport (see 620 ILCS 25 and 30);

 

d)         the airport does not provide scheduled commercial air service in counties greater than 5,000,000 population (Section 34b(a)(2) of the Act);

 

e)         the Owner is  not in default of  an outstanding, unpaid loan under this Part.

 

(Source:  Amended at 26 Ill. Reg. 18476, effective December 12, 2002)

 

Section 15.40  Eligible Property

 

Only property meeting the following conditions will be eligible for purchase with funds loaned under this Part.

 

a)         The property must be shown on the ALP.

 

b)         The property must not have significant environmental problems or liabilities as determined by the Department.  Environmental problems or liabilities are considered significant if the cost of remedying such conditions exceeds 40% of the value of the property.  If federal reimbursement is to be sought, the Owner must comply with the National Environmental Policy Act of 1969 (42 USC 4321 - 4347) as well as with all pertinent federal and State regulations and directives related to environmental impacts.  Even if no federal reimbursement is anticipated, the Department must be fully advised of environmental conditions, prior to closing, by a formal statement from an environmental professional approved by the Department.  The cost of this environmental statement is eligible to be included in the loan amount.

 

c)         The property to be acquired must be part of a planned airport improvement or real estate acquisition project.  The property shall be capable of being used and developed, for airport purposes, in substantial compliance with State and federal laws.

 

Section 15.50  Application Procedure

 

Applications for loans under this Part shall be made in writing on forms that are approved by the Department.  Evidence must be provided with the application that the governing body of the Owner has approved the loan request. An example of such evidence would be a certified resolution by the governing body of the Owner.  Application forms are available upon request by contacting the Chief of Airport Engineering, Division of Aeronautics, #1 Langhorne Bond Drive, Springfield, Illinois 62707-8415, 217-785-8514, Fax # 217-785-4533; or at aero@nt.dot.state.il.us.

 

Section 15.60  Evaluating and Prioritizing Loan Applications

 

a)         Real estate loan applications will be prioritized using the same federal and State criteria used to establish the annual Airport Improvement Program. This criteria includes guidance found in Federal Aviation Administration Order 5100.39A (August 22, 2000).  Categories used to evaluate and prioritize the loan applications include but are not limited to the following:

 

1)         safety/security;

 

2)         regulatory requirement (lighting, marking, visual guidance systems, etc.);

 

3)         reconstruction/rehabilitation (preservation, repairs, restoration of airside service area);

 

4)         environmental (part 150 noise, EIS);

 

5)         planning;

 

6)         capacity; and

 

7)         FAA design standards.

 

b)         Application submittal periods are as follows:

 

1)         the first working day in January through the last working day in March;

 

2)         the first working day in April through the last working day in June;

 

3)         the first working day in July through the last working day in September; and

 

4)         the first working day in October through the last working day in December.

 

A)        Applications will be held until the end of the period in which they are received and will not be acted on until that period is over.  This provision will avoid confusion associated with a first-in-time/first-in-right approval method.  All timely submitted loan applications will be evaluated and prioritized solely on the criteria set forth in subsection (a).

 

B)        The Division will review the application and notify the Owner in writing of the status of the application within 30 calendar days after the end of each period.  The notification will inform the Owner of approval or of the need for additional information necessary for loan approval.  The Owner will have 30 calendar days after receipt of written notification from the Division to provide additional information.  If the Owner fails to satisfy the Division's request for additional information, the application will be held until the next period unless the Owner or airport does not comply with the conditions set forth in Section 15.30.

 

c)         If appropriated funds are exhausted, then applications made during that period will be held for one year or until monies become available, whichever is sooner.  Such applications will be given the same priority as other applications submitted during the period in which monies become available.

 

Section 15.70  Conditions of Loan

 

Loans under this Part may only be issued pursuant to a binding, written agreement that contains the following conditions and requirements.

 

a)         The annual rate of interest shall be the lesser of either 2 percent below the Prime Rate charged by banks, as published by the Federal Reserve Board, in effect at the time the Department approves the loan, or a rate determined by the Department, after consultation with the Bureau of the Budget, that will not adversely affect the tax-exempt status of interest on the bonds of the State issued in whole or in part to make deposits into the Airport Land Loan Revolving Fund,  nor diminish the benefit to the State of the tax-exempt status of the interest on such bonds.  In no event shall less than 2 percent be charged.  (Section 34b(b)(1) of the Act)

 

b)         The term of any loan shall not exceed five years, but it may be for less by mutual agreement. (Section 34b(b)(2) of the Act)

 

c)         The loan shall be secured with the property purchased, in whole or in part, with  the loan.  The property shall be collateral for the loan.  The Owner shall assign a first priority interest in the property to the State and shall cooperate with the Department to record the Department's interest in the property.  (Section 34b(b)(5) of the Act)

 

d)         No funds may be transferred to an Owner under this Part until the Department's interest in the property is secured as outlined in subsection (c) of this Section.

 

e)         If federal reimbursement will be requested for the real estate interest purchased with a loan granted under this Part, the real estate acquisition process must comply with the Uniform Relocation Assistance and Real Property Acquisition Policy Act of 1970, as amended (the Uniform Act)  (42 USC 4601 et seq.). All real estate acquisition costs eligible under the Uniform Act may be paid with money lent under this Part; however, the amount of the loan cannot exceed fair market value of the property, as determined by the Department.

 

f)         If any or all of the interest in the property is transferred (see Section 15.80(e)), the Owner and the Department shall retain an avigation easement in the transferred property interest that meets the requirements of the Department. (See 92 Ill. Adm. Code 14 and the FAA Policy and Procedures Memorandum 5190.6, Appendix 3, June 14, 1994.)

 

g)         If a loan application is accepted, the Owner must do, and bear the cost of, the following:

 

1)         provide an appraisal of the property by an appraiser currently licensed as a certified general real estate appraiser with the State of Illinois;

 

2)         secure a title insurance policy for the purchase price of the parcel that is the subject of the loan; and

 

3)         file the Notice of Lien with the county recorder for the county in which the subject property is located.

 

(Source:  Amended at 25 Ill. Reg. 14523, effective October 27, 2001)

 

Section 15.80  Repayment Requirements

 

a)         Loan payments shall be scheduled in equal amounts for the periods determined under subsection (b) of this Section.  The loan payments shall be calculated so that the loan is completely repaid, with interest, on outstanding balances, by the end of the term determined under Section 15.70(b).

 

b)         The period of loan payments shall be annual, and the annual payment will be due on the anniversary of the date the loan was received by the Owner unless, by mutual agreement, a period of less than one year is chosen.

 

c)         There will be no penalty for early payment ahead of the payment schedule. In the event of a prepayment, the principal of the loan shall be reduced.  The amount of the periodic payments shall remain the same, but the number of those payments, and the period of the loan, shall be reduced unless the Department agrees to reduce the amount of the payments and to allow the period of the loan to remain the same. (Section 34b(b)(4) of the Act)

 

d)         If the Owner receives a project grant(s) for the acquisition of the property, such grant(s) shall be applied to the payment of the loan and the principal shall be reduced accordingly.  The amount of the periodic payments shall remain the same, but the number of those payments, and the period of the loan, shall be reduced unless the Department agrees to reduce the amount of the payments and to allow the period of the loan to remain the same.

 

e)         No interest in the property can be transferred by the Owner without express, written permission from the Department.  If such an interest is transferred, in whole or in part, then the loan must be repaid in full from the proceeds of the transfer.

 

Section 15.90  Default

 

a)         If the loan payment is not made within 15 days after the scheduled date determined under Section 15.80(b), a penalty of 10% of the payment shall be assessed.

 

b)         If no payment has been received within 30 days after the scheduled payment date, the loan shall be considered in default.  (Section 34b(b)(6) of the Act)

 

c)         As soon as a loan is considered in default, the Department shall notify the public airport Owner and attempt to enter into a renegotiation of the loan payment amounts and schedule determined under Section 15.80(b).  In no case shall the term of the loan be extended beyond the initial term determined under Section 15.70(b), and the interest rate may not be lowered or any interest be forgiven.  If a renegotiation of loan payment amounts and schedule is obtained to the Department's satisfaction within 30 days after notification of default, then the new payment schedule shall replace the one determined by Section 15.80(b) and shall be used to measure compliance with the loan for purposes of default.

 

d)         If, after 30 days after notification of default, the Department has not obtained a renegotiation to its satisfaction, the Department shall declare the loan balance due and payable immediately.

 

e)         If the Owner cannot immediately pay the balance of the loan, the Department shall proceed to foreclose. (Section 34b(b)(7) of the Act)