97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3573

 

Introduced 2/24/2011, by Rep. Wayne Rosenthal - Norine Hammond - Jil Tracy - Adam Brown

 

SYNOPSIS AS INTRODUCED:
 
20 ILCS 3501/830-60 new

    Amends the Illinois Finance Authority Act. Creates the Rural Natural Gas Expansion Loan Guarantee Program. Authorizes the Authority to issue State Guarantees to lenders for loans to agribusinesses for the purpose of expanding or increasing capacity of natural gas lines for their agribusiness. Provides that lenders shall apply for the State Guarantees on forms provided by the Authority. Provides that the lender must agree to charge an interest rate, which may vary, that the Authority determines to be below the market rate of interest generally available to the agribusiness. Provides that a State Guarantee shall not exceed $5,000,000 per agribusiness. Provides that the Illinois Farmer and Agribusiness Loan Guarantee Fund may be used to secure State Guarantees.


LRB097 09505 PJG 49642 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3573LRB097 09505 PJG 49642 b

1    AN ACT concerning State government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Finance Authority Act is amended by
5adding Section 830-60 as follows:
 
6    (20 ILCS 3501/830-60 new)
7    Sec. 830-60. Rural Natural Gas Expansion Loan Guarantee
8Program.
9    (a) The Authority is authorized to issue State Guarantees
10to lenders for loans to agribusinesses for the purpose of
11expanding or increasing capacity of natural gas lines for their
12agribusinesses. "Agribusiness" has the meaning provided in
13Section 801-10 of this Act.
14    (b) The Authority may approve applications for natural gas
15line expansions and upgrades by agribusinesses that promote
16expansion and diversification of the agricultural economy.
17Lenders shall apply for the State Guarantees on forms provided
18by the Authority and certify that the application and any other
19documents submitted are true and correct. The lender or
20borrower, or both in combination, shall pay an administrative
21fee as determined by the Authority. The application shall, at a
22minimum, contain the agribusiness' name, address, present
23credit and financial information, including cash flow

 

 

HB3573- 2 -LRB097 09505 PJG 49642 b

1statements, financial statements, balance sheets, and any
2other information pertinent to the application, and the
3collateral to be used to secure the State Guarantee. The lender
4must agree to charge an interest rate, which may vary, on the
5loan that the Authority determines to be below the market rate
6of interest generally available to the borrower. If both the
7lender and applicant agree, the interest rate on the State
8guaranteed loan can be converted to a fixed interest rate at
9any time during the term of the loan.
10    (c) Any State Guarantee provided under this Section (i)
11shall not exceed $5,000,000 per agribusiness, (ii) shall not
12exceed a term of 15 years, and (iii) shall be subject to an
13annual review and renewal by the lender and the Authority. Only
14one such State Guarantee shall be made per agribusiness per
15location. A State Guarantee shall not be revoked by the
16Authority without a 90-day notice, in writing, to all parties.
17    (d) The lender shall not call due any loan for any reason
18except for lack of performance, insufficient collateral, or
19maturity. A lender may review and withdraw or continue with a
20State Guarantee on an annual basis after the first 5 years
21following closing of the loan application if the loan contract
22provided for an interest rate that shall not vary. A lender
23shall not withdraw a State Guarantee if the loan contract
24provides for an interest rate that may vary, except for reasons
25set forth in the contract.
26    (e) The Authority shall provide or renew a State Guarantee

 

 

HB3573- 3 -LRB097 09505 PJG 49642 b

1to a lender if:
2        (i) The lender pays a fee equal to 25 basis points on
3    the loan to the Authority on an annual basis.
4        (ii) The application provides collateral acceptable to
5    the Authority that is at least equal to the State's portion
6    of the Guarantee to be provided.
7        (iii) The lender assumes all responsibility and costs
8    for pursuing legal action on collecting any loan that is
9    delinquent or in default.
10        (iv) The lender is at risk for the first 15% of the
11    outstanding principal of the note for which the State
12    Guarantee is provided.
13    (f) The Illinois Farmer and Agribusiness Loan Guarantee
14Fund may be used to secure State Guarantees issued under this
15Section as provided in Section 830-35.
16    (g) Notwithstanding the provisions of this Section 830-60
17with respect to the agribusinesses who may obtain State
18Guarantees, the Authority may promulgate rules establishing
19the eligibility of agribusinesses and lenders to participate in
20the State Guarantee program and the terms, standards, and
21procedures that will apply, when the Authority finds that
22emergency conditions in Illinois agriculture have created the
23need for State Guarantees pursuant to terms, standards, and
24procedures other than those specified in this Section.