(20 ILCS 3501/830-30)
Sec. 830-30. State Guarantees for existing debt.
(a) The Authority is authorized to issue State Guarantees for farmers'
existing
debts held by a lender. For the purposes of this
Section, a farmer shall be a
resident of Illinois, who is a principal operator of a farm or land, at least
50% of whose annual gross income is derived from farming and whose debt to
asset
ratio shall not be less than 40%, except in those cases where the applicant has
previously used the guarantee program there shall be no debt to asset ratio or
income restriction. For the purposes of this
Section, debt to asset ratio shall
mean the current outstanding liabilities of the farmer divided by the current
outstanding assets of the farmer. The Authority shall establish the maximum
permissible debt to asset ratio based on criteria established by the Authority.
Lenders shall apply for the State Guarantees on forms provided by the Authority
and certify that the application and any other documents submitted are true and
correct. The lender or borrower, or both in combination, shall pay an
administrative fee as determined by the Authority. The applicant shall be
responsible for paying any fees or charges involved in recording mortgages,
releases, financing statements, insurance for secondary market issues and any
other similar fees or charges as the Authority may require. The application
shall at a minimum contain the farmer's name, address, present credit and
financial information, including cash flow statements, financial statements,
balance sheets, and any other information pertinent to the application, and the
collateral to be used to secure the State Guarantee. In addition, the lender
must agree to bring the farmer's debt to a current status at the time the State
Guarantee is provided and must also agree to charge a fixed or adjustable
interest rate which the Authority determines to be below the market rate of
interest generally available to the borrower. If both the lender and applicant
agree, the interest rate on the State Guarantee Loan can be converted to a fixed
interest rate at any time during the term of the loan.
Any State Guarantees provided under this
Section (i) shall not exceed $500,000
per farmer, (ii) shall be set up on a payment schedule not to exceed 30 years,
and shall be no longer than 30 years in duration, and (iii) shall be subject to
an annual review and renewal by the lender and the Authority; provided that
only
one such State Guarantee shall be outstanding per farmer at any one time. No
State Guarantee shall be revoked by the Authority without a 90-day notice, in
writing, to all parties. In those cases where the borrower has not previously
used the guarantee program, the lender shall not call due any loan during the
first 3 years for any reason except for lack of performance or insufficient
collateral. The lender can review and withdraw or continue with the State
Guarantee on an annual basis after the first 3 years of the loan, provided a
90-day notice, in writing, to all parties has been given.
(b) The Authority shall provide or renew a State Guarantee to a lender if:
(i) A fee equal to 25 basis points on the loan is paid to the Authority on an annual |
(c) There is hereby created outside of the State treasury a special fund to
be
known as the Illinois Agricultural Loan Guarantee Fund. The State Treasurer
shall be custodian of this Fund. Any amounts in the Illinois Agricultural Loan
Guarantee Fund not currently needed to meet the obligations of the Fund shall
be
invested as provided by law or used by the Authority to make direct loans or originate or purchase loan participations under subsection (i) or (r) of Section 801-40. All interest earned from these investments
shall be deposited into the Fund until the Fund reaches the maximum amount
authorized in this Act; thereafter, interest earned shall be deposited into the
General Revenue Fund. After September 1, 1989, annual investment earnings equal
to 1.5% of the Fund shall remain in the Fund to be used for the purposes
established in
Section 830-40 of this Act. All earnings on direct loans or loan participations made by the Authority under subsection (i) or (r) of Section 801-40 with amounts in this Fund shall become funds of the Authority. The Authority is authorized to
transfer to the Fund such amounts as are necessary to satisfy claims during the
duration of the State Guarantee program to secure State Guarantees issued under
this
Section, provided that amounts to be paid from the Industrial Project Insurance Fund created under Article 805 of this Act may be paid by the Authority directly to satisfy claims and need not
be deposited first into the Illinois Agricultural Loan Guarantee Fund. If for any reason the General Assembly fails to make an
appropriation sufficient to meet these obligations, this Act shall constitute
an
irrevocable and continuing appropriation of an amount necessary to secure
guarantees as defaults occur and the irrevocable and continuing authority for,
and direction to, the State Treasurer and the Comptroller to make the necessary
transfers to the Illinois Agricultural Loan Guarantee Fund, as directed by the
Governor, out of the General Revenue Fund. Within 30 days after November 15,
1985, the Authority may transfer up to $7,000,000 from available appropriations
into the Illinois Agricultural Loan Guarantee Fund for the purposes of this
Act.
Thereafter, the Authority may transfer additional amounts into the Illinois
Agricultural Loan Guarantee Fund to secure guarantees for defaults as defaults
occur. In the event of default by the farmer, the lender shall be entitled to,
and the Authority shall direct payment on, the State Guarantee after 90 days of
delinquency. All payments by the Authority to satisfy claims against the State Guarantee shall be made, in whole or in part, from any of the following funds in such order and in such amounts as the Authority shall determine: (1) the Industrial Project Insurance Fund created under Article 805 of this Act (if the Authority exercises its discretion under subsection (j) of Section 805-20); (2) the Illinois Agricultural Loan Guarantee Fund; or (3) the Illinois Farmer and Agribusiness Loan Guarantee Fund.
The Illinois Agricultural Loan Guarantee Fund shall guarantee receipt of payment
of the 85% of the principal and interest owed on the State Guarantee Loan by the
farmer to the guarantee holder, provided that payments by the Authority to satisfy claims against the State Guarantee shall be made in accordance with the preceding sentence. It shall be the responsibility of the lender to
proceed with the collecting and disposing of collateral on the State Guarantee under this Section, Section 830-35, Section 830-45, Section 830-50, Section 830-55, or Article 835
within 14 months of the time the State Guarantee is declared delinquent;
provided, however, that the lender shall not collect or dispose of collateral on
the State Guarantee without the express written prior approval of the Authority.
If the lender does not dispose of the collateral within 14 months, the lender
shall be liable to repay to the State interest on the State Guarantee equal to
the same rate which the lender charges on the State Guarantee; provided,
however, that the Authority may extend the 14-month period for a lender in the
case of bankruptcy or extenuating circumstances. The Fund from which a payment is made shall be reimbursed
for any amounts paid from that Fund under this
Section, Section 830-35, Section 830-45, Section 830-50, Section 830-55, or Article 835 upon liquidation of the collateral. The
Authority, by resolution of the Board, may borrow sums from the Fund and
provide
for repayment as soon as may be practical upon receipt of payments of principal
and interest by a farmer. Money may be borrowed from the Fund by the Authority
for the sole purpose of paying certain interest costs for farmers associated
with selling a loan subject to a State Guarantee in a secondary market as may
be
deemed reasonable and necessary by the Authority.
(d) Notwithstanding the provisions of this
Section 830-30 with respect to the
farmers and lenders who may obtain State Guarantees, the Authority may
promulgate rules establishing the eligibility of farmers and lenders to
participate in the State guarantee program and the terms, standards, and
procedures that will apply, when the Authority finds that emergency conditions
in Illinois agriculture have created the need for State Guarantees pursuant to
terms, standards, and procedures other than those specified in this
Section.
(Source: P.A. 100-919, eff. 8-17-18; 101-81, eff. 7-12-19.)
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