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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
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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.
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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
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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
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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
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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
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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
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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
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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.
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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
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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
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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
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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
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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.
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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.)