093_SB1211eng SB1211 Engrossed LRB093 07702 BDD 07890 b 1 AN ACT concerning farm development. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Illinois Farm Development Act is amended 5 by changing Sections 2, 12.1, 12.2, 12.4, and 12.5 as 6 follows: 7 (20 ILCS 3605/2) (from Ch. 5, par. 1202) 8 Sec. 2. As used in this Act: (a) "Affiliate" means, with 9 respect to any Lender, any person, firm or corporation 10 controlled by, or under common control with, such Lender, and 11 any person, firm or corporation controlling such Lender. 12 (b) "Agricultural Facility" means land, any building or 13 other improvement thereon or thereto, and any personal 14 properties deemed necessary or suitable for use, whether or 15 not now in existence, in farming, ranching, the production of 16 agricultural commodities (including, without limitation, the 17 products of aquaculture, hydroponics and silviculture) or the 18 treating, processing or storing of such agricultural 19 commodities when such activities are customarily engaged in 20 by farmers as a part of farming. 21 (c) "Authority" means the Illinois Farm Development 22 Authority created in this Act. 23 (d) "Board" means the governing body of the Authority. 24 (e) "Bonds" means and shall include bonds, notes, 25 certificates, bond, grant or revenue anticipation notes or 26 any other evidence of indebtedness representing an obligation 27 to pay money. 28 (f) "Lender" means any federal or State chartered bank, 29 Federal Land Bank, Production Credit Association, Bank for 30 Cooperatives, federal or State chartered savings and loan 31 association or building and loan association, Small Business SB1211 Engrossed -2- LRB093 07702 BDD 07890 b 1 Investment Company or any other institution qualified within 2 this State to originate and service loans, including, but 3 without limitation to, insurance companies, credit unions and 4 mortgage loan companies. "Lender" also means a wholly owned 5 subsidiary of a manufacturer, seller or distributor of goods 6 or services that makes loans to businesses or individuals, 7 commonly known as a "captive finance company". 8 (g) "Person" means, unless limited to a natural person 9 by the context in which it is used, a person, corporation, 10 association, trust, partnership or cooperative. 11 (h) "State" means the State of Illinois. 12 (i) "Agribusiness" means any sole proprietorship, 13 limited partnership, copartnership, joint venture, 14 corporation or cooperative which operates or will operate a 15 facility located within the State of Illinois that is related 16 to the processing of agricultural commodities (including, 17 without limitation, the products of aquaculture, hydroponics 18 and silviculture) or the manufacturing, production or 19 construction of agricultural buildings, structures, 20 equipment, implements, and supplies, or any other facilities 21 or processes used in agricultural production. Agribusiness 22 includes but is not limited to the following: 23 (1) grain handling and processing, including grain 24 storage, drying, treatment, conditioning, milling and 25 packaging; 26 (2) seed and feed grain development and processing; 27 (3) fruit and vegetable processing, including 28 preparation, canning and packaging; 29 (4) processing of livestock and livestock products, 30 dairy products, poultry and poultry products, fish or 31 apiarian products, including slaughter, shearing, collecting, 32 preparation, canning and packaging; 33 (5) fertilizer and agricultural chemical manufacturing, 34 processing, application and supplying; SB1211 Engrossed -3- LRB093 07702 BDD 07890 b 1 (6) farm machinery, equipment and implement 2 manufacturing and supplying; 3 (7) manufacturing and supplying of agricultural 4 commodity processing machinery and equipment, including 5 machinery and equipment used in slaughter, treatment, 6 handling, collecting, preparation, canning or packaging of 7 agricultural commodities; 8 (8) farm building and farm structure manufacturing, 9 construction and supplying; 10 (9) construction, manufacturing, implementation, 11 supplying or servicing of irrigation, drainage and soil and 12 water conservation devices or equipment; 13 (10) fuel processing and development facilities that 14 produce fuel from agricultural commodities or by-products; 15 (11) facilities and equipment for processing and 16 packaging agricultural commodities specifically for export; 17 (12) facilities and equipment for forestry product 18 processing and supplying, including sawmilling operations, 19 wood chip operations, timber harvesting operations, and 20 manufacturing of prefabricated buildings, paper, furniture or 21 other goods from forestry products; 22 (13) facilities and equipment for research and 23 development of products, processes and equipment for the 24 production, processing, preparation or packaging of 25 agricultural commodities and by-products. 26 (j) "Fund" means the Illinois Agricultural Loan 27 Guarantee Fund established pursuant to Section 12.1 of this 28 Act. 29 (k) "State Guarantee" means a note held by a person for 30 which the State of Illinois shall be liable for 90%85%of 31 the total principal and interest of the note as determined by 32 the Authority. 33 (l) "Asset" shall include, but not be limited to the 34 following: cash crops or feed on hand; livestock held for SB1211 Engrossed -4- LRB093 07702 BDD 07890 b 1 sale; breeding stock; marketable bonds and securities; 2 securities not readily marketable; accounts receivable; notes 3 receivable; cash invested in growing crops; net cash value of 4 life insurance; machinery and equipment; cars and trucks; 5 farm and other real estate including life estates and 6 personal residence; value of beneficial interests in trusts; 7 government payments or grants; and any other assets. 8 (m) "Liability" shall include, but not be limited to the 9 following: accounts payable; notes or other indebtedness owed 10 to any source; taxes; rent; amounts owed on real estate 11 contracts or real estate mortgages; judgments; accrued 12 interest payable; and any other liability. 13 (Source: P.A. 85-293.) 14 (20 ILCS 3605/12.1) (from Ch. 5, par. 1212.1) 15 Sec. 12.1. State Guarantees for existing debt. 16 (a) The Authority is authorized to issue State 17 Guarantees for farmers' existing debts held by a lender. For 18 the purposes of this Section, a farmer shall be a resident of 19 Illinois, who is a principal operator of a farm or land, at 20 least 50% of whose annual gross income is derived from 21 farming and whose debt to asset ratio shall not be less than 22 40%, except in those cases where the applicant has previously 23 used the guarantee program there shall be no debt to asset 24 ratio or income restriction. For the purposes of this 25 Section, debt to asset ratio shall mean the current 26 outstanding liabilities of the farmer divided by the current 27 outstanding assets of the farmer. The Authority shall 28 establish the maximum permissible debt to asset ratio based 29 on criteria established by the Authority. 30 Lenders shall apply for the State Guarantees on forms 31 provided by the Authority and certify that the application 32 and any other documents submitted are true and correct. The 33 lender or borrower, or both in combination, shall pay an SB1211 Engrossed -5- LRB093 07702 BDD 07890 b 1 administrative fee as determined by the Authority. The 2 applicant shall be responsible for paying any fees or charges 3 involved in recording mortgages, releases, financing 4 statements, insurance for secondary market issues and any 5 other similar fees or charges as the Authority may require. 6 The application shall at a minimum contain the farmer's name, 7 address, present credit and financial information, including 8 cash flow statements, financial statements, balance sheets, 9 and any other information pertinent to the application, and 10 the collateral to be used to secure the State Guarantee. In 11 addition, the lender must agree to bring the farmer's debt to 12 a current status at the time the State Guarantee is provided 13 and must also agree to charge a fixed or adjustable interest 14 rate which the Authority determines to be below the market 15 rate of interest generally available to the borrower. If 16 both the lender and applicant agree, the interest rate on the 17 State Guarantee Loan can be converted to a fixed interest 18 rate at any time during the term of the loan. 19 Any State Guarantees provided under this Section (i) 20 shall not exceed $500,000 per farmer, (ii) shall be set up on 21 a payment schedule not to exceed 30 years, and shall be no 22 longer than 30 years in duration, and (iii) shall be subject 23 to an annual review and renewal by the lender and the 24 Authority; provided that only one such State Guarantee shall 25 be outstanding per farmer at any one time. No State 26 Guarantee shall be revoked by the Authority without a 90 day 27 notice, in writing, to all parties. In those cases were the 28 borrower has not previously used the guarantee program, the 29 lender shall not call due any loan during the first 3 years 30 for any reason except for lack of performance or insufficient 31 collateral. The lender can review and withdraw or continue 32 with the State Guarantee on an annual basis after the first 3 33 years of the loan, provided a 90 day notice, in writing, to 34 all parties has been given. SB1211 Engrossed -6- LRB093 07702 BDD 07890 b 1 (b) The Authority shall provide or renew a State 2 Guarantee to a lender if: 3 (i) A fee equal to 25 basis points on the loan is 4 paid to the Authority on an annual basis by the lender. 5 (ii) The application provides collateral acceptable 6 to the Authority that is at least equal to the State's 7 portion of the Guarantee to be provided. 8 (iii) The lender assumes all responsibility and 9 costs for pursuing legal action on collecting any loan 10 that is delinquent or in default. 11 (iv) The lender is responsible for the first 10% 1215%of the outstanding principal of the note for which 13 the State Guarantee has been applied. 14 (c) There is hereby created outside of the State 15 Treasury a special fund to be known as the Illinois 16 Agricultural Loan Guarantee Fund. The State Treasurer shall 17 be custodian of this Fund. Any amounts in the Illinois 18 Agricultural Loan Guarantee Fund not currently needed to meet 19 the obligations of the Fund shall be invested as provided by 20 law, and all interest earned from these investments shall be 21 deposited into the Fund until the Fund reaches the maximum 22 amount authorized in this Act; thereafter, interest earned 23 shall be deposited into the General Revenue Fund. After 24 September 1, 1989, annual investment earnings equal to 1.5% 25 of the Fund shall remain in the Fund to be used for the 26 purposes established in Section 12.3 of this Act. 27 The Authority is authorized to transfer to the Fund such 28 amounts as are necessary to satisfy claims during the 29 duration of the State Guarantee program to secure State 30 Guarantees issued under this Section. If for any reason the 31 General Assembly fails to make an appropriation sufficient to 32 meet these obligations, this Act shall constitute an 33 irrevocable and continuing appropriation of an amount 34 necessary to secure guarantees as defaults occur and the SB1211 Engrossed -7- LRB093 07702 BDD 07890 b 1 irrevocable and continuing authority for, and direction to, 2 the State Treasurer and the Comptroller to make the necessary 3 transfers to the Illinois Agricultural Loan Guarantee Fund, 4 as directed by the Governor, out of the General Revenue Fund. 5 Within 30 days after November 15, 1985, the Authority may 6 transfer up to $7,000,000 from available appropriations into 7 the Illinois Agricultural Loan Guarantee Fund for the 8 purposes of this Act. Thereafter, the Authority may transfer 9 additional amounts into the Illinois Agricultural Loan 10 Guarantee Fund to secure guarantees for defaults as defaults 11 occur. 12 In the event of default by the farmer, the lender shall 13 be entitled to, and the Authority shall direct payment on, 14 the State Guarantee after 90 days of delinquency. All 15 payments by the Authority shall be made from the Illinois 16 Agricultural Loan Guarantee Fund to satisfy claims against 17 the State Guarantee. The Illinois Agricultural Loan 18 Guarantee Fund shall guarantee receipt of payment of the 90% 1985%of the principal and interest owed on the State Guarantee 20 Loan by the farmer to the guarantee holder. 21 It shall be the responsibility of the lender to proceed 22 with the collecting and disposing of collateral on the State 23 Guarantee within 14 months of the time the State Guarantee is 24 declared delinquent; provided, however, that the lender shall 25 not collect or dispose of collateral on the State Guarantee 26 without the express written prior approval of the Authority. 27 If the lender does not dispose of the collateral within 14 28 months, the lender shall be liable to repay to the State 29 interest on the State Guarantee equal to the same rate which 30 the lender charges on the State Guarantee; provided, however, 31 that the Authority may extend the 14 month period for a 32 lender in the case of bankruptcy or extenuating 33 circumstances. The Fund shall be reimbursed for any amounts 34 paid under this Section upon liquidation of the collateral. SB1211 Engrossed -8- LRB093 07702 BDD 07890 b 1 The Authority, by resolution of the Board, may borrow sums 2 from the Fund and provide for repayment as soon as may be 3 practical upon receipt of payments of principal and interest 4 by a farmer. Money may be borrowed from the Fund by the 5 Authority for the sole purpose of paying certain interest 6 costs for farmers associated with selling a loan subject to a 7 State Guarantee in a secondary market as may be deemed 8 reasonable and necessary by the Authority. 9 (d) Notwithstanding the provisions of this Section 12.1 10 with respect to the farmers and lenders who may obtain State 11 Guarantees, the Authority may promulgate rules establishing 12 the eligibility of farmers and lenders to participate in the 13 State guarantee program and the terms, standards, and 14 procedures that will apply, when the Authority finds that 15 emergency conditions in Illinois agriculture have created the 16 need for State Guarantees pursuant to terms, standards, and 17 procedures other than those specified in this Section. 18 (Source: P.A. 90-325, eff. 8-8-97; 91-386, eff. 1-1-00.) 19 (20 ILCS 3605/12.2) (from Ch. 5, par. 1212.2) 20 Sec. 12.2. State Guarantees for loans to farmers and 21 agribusiness; eligibility. 22 (a) The Authority is authorized to issue State 23 Guarantees to lenders for loans to eligible farmers and 24 agribusinesses for purposes set forth in this Section. For 25 purposes of this Section, an eligible farmer shall be a 26 resident of Illinois (i) who is principal operator of a farm 27 or land, at least 50% of whose annual gross income is derived 28 from farming, (ii) whose annual total sales of agricultural 29 products, commodities, or livestock exceeds $20,000, and 30 (iii) whose net worth does not exceed $500,000. An eligible 31 agribusiness shall be that as defined in Section 2 of this 32 Act. 33 The Authority may approve applications by farmers and SB1211 Engrossed -9- LRB093 07702 BDD 07890 b 1 agribusinesses that promote diversification of the farm 2 economy of this State through the growth and development of 3 new crops or livestock not customarily grown or produced in 4 this State or that emphasize a vertical integration of grain 5 or livestock produced or raised in this State into a finished 6 agricultural product for consumption or use. "New crops or 7 livestock not customarily grown or produced in this State" 8 shall not include corn, soybeans, wheat, swine, or beef or 9 dairy cattle. "Vertical integration of grain or livestock 10 produced or raised in this State" shall include any new or 11 existing grain or livestock grown or produced in this State. 12 Lenders shall apply for the State Guarantees on forms 13 provided by the Authority, certify that the application and 14 any other documents submitted are true and correct, and pay 15 an administrative fee as determined by the Authority. The 16 applicant shall be responsible for paying any fees or charges 17 involved in recording mortgages, releases, financing 18 statements, insurance for secondary market issues and any 19 other similar fees or charges as the Authority may require. 20 The application shall at a minimum contain the farmer's or 21 agribusiness' name, address, present credit and financial 22 information, including cash flow statements, financial 23 statements, balance sheets, and any other information 24 pertinent to the application, and the collateral to be used 25 to secure the State Guarantee. In addition, the lender must 26 agree to charge an interest rate, which may vary, on the loan 27 that the Authority determines to be below the market rate of 28 interest generally available to the borrower. If both the 29 lender and applicant agree, the interest rate on the State 30 Guarantee Loan can be converted to a fixed interest rate at 31 any time during the term of the loan. 32 Any State Guarantees provided under this Section (i) 33 shall not exceed $500,000 per farmer or an amount as 34 determined by the Authority on a case-by-case basis for an SB1211 Engrossed -10- LRB093 07702 BDD 07890 b 1 agribusiness, (ii) shall not exceed a term of 15 years, and 2 (iii) shall be subject to an annual review and renewal by the 3 lender and the Authority; provided that only one such State 4 Guarantee shall be made per farmer or agribusiness, except 5 that additional State Guarantees may be made for purposes of 6 expansion of projects financed in part by a previously issued 7 State Guarantee. No State Guarantee shall be revoked by the 8 Authority without a 90 day notice, in writing, to all 9 parties. The lender shall not call due any loan for any 10 reason except for lack of performance, insufficient 11 collateral, or maturity. A lender may review and withdraw or 12 continue with a State Guarantee on an annual basis after the 13 first 5 years following closing of the loan application if 14 the loan contract provides for an interest rate that shall 15 not vary. A lender shall not withdraw a State Guarantee if 16 the loan contract provides for an interest rate that may 17 vary, except for reasons set forth herein. 18 (b) The Authority shall provide or renew a State 19 Guarantee to a lender if: 20 i. A fee equal to 25 basis points on the loan is 21 paid to the Authority on an annual basis by the lender. 22 ii. The application provides collateral acceptable 23 to the Authority that is at least equal to the State's 24 portion of the Guarantee to be provided. 25 iii. The lender assumes all responsibility and 26 costs for pursuing legal action on collecting any loan 27 that is delinquent or in default. 28 iv. The lender is responsible for the first 10%15%29 of the outstanding principal of the note for which the 30 State Guarantee has been applied. 31 (c) There is hereby created outside of the State 32 Treasury a special fund to be known as the Illinois Farmer 33 and Agribusiness Loan Guarantee Fund. The State Treasurer 34 shall be custodian of this Fund. Any amounts in the Fund not SB1211 Engrossed -11- LRB093 07702 BDD 07890 b 1 currently needed to meet the obligations of the Fund shall be 2 invested as provided by law, and all interest earned from 3 these investments shall be deposited into the Fund until the 4 Fund reaches the maximum amounts authorized in this Act; 5 thereafter, interest earned shall be deposited into the 6 General Revenue Fund. After September 1, 1989, annual 7 investment earnings equal to 1.5% of the Fund shall remain in 8 the Fund to be used for the purposes established in Section 9 12.3 of this Act. 10 The Authority is authorized to transfer such amounts as 11 are necessary to satisfy claims from available appropriations 12 and from fund balances of the Farm Emergency Assistance Fund 13 as of June 30 of each year to the Illinois Farmer and 14 Agribusiness Loan Guarantee Fund to secure State Guarantees 15 issued under this Section and Sections 12.4 and 12.5. If for 16 any reason the General Assembly fails to make an 17 appropriation sufficient to meet these obligations, this Act 18 shall constitute an irrevocable and continuing appropriation 19 of an amount necessary to secure guarantees as defaults occur 20 and the irrevocable and continuing authority for, and 21 direction to, the State Treasurer and the Comptroller to make 22 the necessary transfers to the Illinois Farmer and 23 Agribusiness Loan Guarantee Fund, as directed by the 24 Governor, out of the General Revenue Fund. 25 In the event of default by the borrower on State 26 Guarantee Loans under this Section, Section 12.4, or Section 27 12.5, the lender shall be entitled to, and the Authority 28 shall direct payment on, the State Guarantee after 90 days of 29 delinquency. All payments by the Authority shall be made 30 from the Illinois Farmer and Agribusiness Loan Guarantee Fund 31 to satisfy claims against the State Guarantee. 32 It shall be the responsibility of the lender to proceed 33 with the collecting and disposing of collateral on the State 34 Guarantee under this Section, Section 12.4, or Section 12.5 SB1211 Engrossed -12- LRB093 07702 BDD 07890 b 1 within 14 months of the time the State Guarantee is declared 2 delinquent. If the lender does not dispose of the collateral 3 within 14 months, the lender shall be liable to repay to the 4 State interest on the State Guarantee equal to the same rate 5 that the lender charges on the State Guarantee, provided that 6 the Authority shall have the authority to extend the 14 month 7 period for a lender in the case of bankruptcy or extenuating 8 circumstances. The Fund shall be reimbursed for any amounts 9 paid under this Section, Section 12.4, or Section 12.5 upon 10 liquidation of the collateral. 11 The Authority, by resolution of the Board, may borrow 12 sums from the Fund and provide for repayment as soon as may 13 be practical upon receipt of payments of principal and 14 interest by a borrower on State Guarantee Loans under this 15 Section, Section 12.4, or Section 12.5. Money may be borrowed 16 from the Fund by the Authority for the sole purpose of paying 17 certain interest costs for borrowers associated with selling 18 a loan subject to a State Guarantee under this Section, 19 Section 12.4, or Section 12.5 in a secondary market as may be 20 deemed reasonable and necessary by the Authority. 21 (d) Notwithstanding the provisions of this Section 12.2 22 with respect to the farmers, agribusinesses, and lenders who 23 may obtain State Guarantees, the Authority may promulgate 24 rules establishing the eligibility of farmers, 25 agribusinesses, and lenders to participate in the State 26 Guarantee program and the terms, standards, and procedures 27 that will apply, when the Authority finds that emergency 28 conditions in Illinois agriculture have created the need for 29 State Guarantees pursuant to terms, standards, and procedures 30 other than those specified in this Section. 31 (Source: P.A. 90-325, eff. 8-8-97; 91-386, eff. 1-1-00.) 32 (20 ILCS 3605/12.4) (from Ch. 5, par. 1212.4) 33 Sec. 12.4. Young Farmer Loan Guarantee Program. SB1211 Engrossed -13- LRB093 07702 BDD 07890 b 1 (a) The Authority is authorized to issue State 2 Guarantees to lenders for loans to finance or refinance debts 3 of young farmers. For the purposes of this Section, a young 4 farmer is a resident of Illinois who is at least 18 years of 5 age and who is a principal operator of a farm or land, who 6 derives at least 50% of annual gross income from farming, 7 whose net worth is not less than $10,000 and whose debt to 8 asset ratio is not less than 40%. For the purposes of this 9 Section, debt to asset ratio means current outstanding 10 liabilities, including any debt to be financed or refinanced 11 under this Section, divided by current outstanding assets. 12 The Authority shall establish the maximum permissible debt to 13 asset ratio based on criteria established by the Authority. 14 Lenders shall apply for the State Guarantees on forms 15 provided by the Authority and certify that the application 16 and any other documents submitted are true and correct. The 17 lender or borrower, or both in combination, shall pay an 18 administrative fee as determined by the Authority. The 19 applicant shall be responsible for paying any fee or charge 20 involved in recording mortgages, releases, financing 21 statements, insurance for secondary market issues, and any 22 other similar fee or charge that the Authority may require. 23 The application shall at a minimum contain the young farmer's 24 name, address, present credit and financial information, 25 including cash flow statements, financial statements, balance 26 sheets, and any other information pertinent to the 27 application, and the collateral to be used to secure the 28 State Guarantee. In addition, the borrower must certify to 29 the Authority that, at the time the State Guarantee is 30 provided, the borrower will not be delinquent in the 31 repayment of any debt. The lender must agree to charge a 32 fixed or adjustable interest rate that the Authority 33 determines to be below the market rate of interest generally 34 available to the borrower. If both the lender and applicant SB1211 Engrossed -14- LRB093 07702 BDD 07890 b 1 agree, the interest rate on the State guaranteed loan can be 2 converted to a fixed interest rate at any time during the 3 term of the loan. 4 State Guarantees provided under this Section (i) shall 5 not exceed $500,000 per young farmer, (ii) shall be set up on 6 a payment schedule not to exceed 30 years, but shall be no 7 longer than 15 years in duration, and (iii) shall be subject 8 to an annual review and renewal by the lender and the 9 Authority. A young farmer may use this program more than once 10 provided the aggregate principal amount of State Guarantees 11 under this Section to that young farmer does not exceed 12 $500,000. No State Guarantee shall be revoked by the 13 Authority without a 90 day notice, in writing, to all 14 parties. 15 (b) The Authority shall provide or renew a State 16 Guarantee to a lender if: 17 (i) The lender pays a fee equal to 25 basis points 18 on the loan to the Authority on an annual basis. 19 (ii) The application provides collateral acceptable 20 to the Authority that is at least equal to the State 21 Guarantee. 22 (iii) The lender assumes all responsibility and 23 costs for pursuing legal action on collecting any loan 24 that is delinquent or in default. 25 (iv) The lender is at risk for the first 10%15%of 26 the outstanding principal of the note for which the State 27 Guarantee is provided. 28 (c) The Illinois Farmer and Agribusiness Loan Guarantee 29 Fund may be used to secure State Guarantees issued under this 30 Section as provided in Section 12.2. 31 (d) Notwithstanding the provisions of this Section 12.4 32 with respect to the young farmers and lenders who may obtain 33 State Guarantees, the Authority may promulgate rules 34 establishing the eligibility of young farmers and lenders to SB1211 Engrossed -15- LRB093 07702 BDD 07890 b 1 participate in the State Guarantee program and the terms, 2 standards, and procedures that will apply, when the Authority 3 finds that emergency conditions in Illinois agriculture have 4 created the need for State Guarantees pursuant to terms, 5 standards, and procedures other than those specified in this 6 Section. 7 (Source: P.A. 90-325, eff. 8-8-97; 91-386, eff. 1-1-00.) 8 (20 ILCS 3605/12.5) 9 Sec. 12.5. Specialized Livestock Guarantee Program. 10 (a) The Authority is authorized to issue State 11 Guarantees to lenders for loans to finance or refinance debts 12 for specialized livestock operations that are or will be 13 located in Illinois. For purposes of this Section, a 14 "specialized livestock operation" includes, but is not 15 limited to, dairy, beef, and swine enterprises. 16 (b) Lenders shall apply for the State Guarantees on 17 forms provided by the Authority and certify that the 18 application and any other documents submitted are true and 19 correct. The lender or borrower, or both in combination, 20 shall pay an administrative fee as determined by the 21 Authority. The applicant shall be responsible for paying any 22 fee or charge involved in recording mortgages, releases, 23 financing statements, insurance for secondary market issues, 24 and any other similar fee or charge that the Authority may 25 require. The application shall, at a minimum, contain the 26 farmer's name, address, present credit and financial 27 information, including cash flow statements, financial 28 statements, balance sheets, and any other information 29 pertinent to the application, and the collateral to be used 30 to secure the State Guarantee. In addition, the borrower 31 must certify to the Authority that, at the time the State 32 Guarantee is provided, the borrower will not be delinquent in 33 the repayment of any debt. The lender must agree to charge a SB1211 Engrossed -16- LRB093 07702 BDD 07890 b 1 fixed or adjustable interest rate that the Authority 2 determines to be below the market rate of interest generally 3 available to the borrower. If both the lender and applicant 4 agree, the interest rate on the State guaranteed loan can be 5 converted to a fixed interest rate at any time during the 6 term of the loan. 7 (c) State Guarantees provided under this Section (i) 8 shall not exceed $1,000,000 per applicant, (ii) shall be no 9 longer than 15 years in duration, and (iii) shall be subject 10 to an annual review and renewal by the lender and the 11 Authority. An applicant may use this program more than once, 12 provided that the aggregate principal amount of State 13 Guarantees under this Section to that applicant does not 14 exceed $1,000,000. A State Guarantee shall not be revoked by 15 the Authority without a 90-day notice, in writing, to all 16 parties. 17 (d) The Authority shall provide or renew a State 18 Guarantee to a lender if: 19 (i) The lender pays a fee equal to 25 basis points 20 on the loan to the Authority on an annual basis. 21 (ii) The application provides collateral acceptable 22 to the Authority that is at least equal to the State 23 Guarantee. 24 (iii) The lender assumes all responsibility and 25 costs for pursuing legal action on collecting any loan 26 that is delinquent or in default. 27 (iv) The lender is at risk for the first 10%15%of 28 the outstanding principal of the note for which the State 29 Guarantee is provided. 30 (e) The Illinois Farmer and Agribusiness Loan Guarantee 31 Fund may be used to secure State Guarantees issued under this 32 Section as provided in Section 12.2. 33 (f) Notwithstanding the provisions of this Section 12.5 34 with respect to the specialized livestock operations and SB1211 Engrossed -17- LRB093 07702 BDD 07890 b 1 lenders who may obtain State Guarantees, the Authority may 2 promulgate rules establishing the eligibility of specialized 3 livestock operations and lenders to participate in the State 4 Guarantee program and the terms, standards, and procedures 5 that will apply, when the Authority finds that emergency 6 conditions in Illinois agriculture have created the need for 7 State Guarantees pursuant to terms, standards, and procedures 8 other than those specified in this Section. 9 (Source: P.A. 91-386, eff. 1-1-00.) 10 Section 99. Effective date. This Act takes effect upon 11 becoming law.