State of Illinois
91st General Assembly

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HB1967 Engrossed                               LRB9104760MWmg

 1        AN  ACT  to  amend  the  Illinois Farm Development Act by
 2    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 Act is amended
 6    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    agribusinesses 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
HB1967 Engrossed            -2-                LRB9104760MWmg
 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
HB1967 Engrossed            -3-                LRB9104760MWmg
 1    this Section.

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

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