SB0324 EnrolledLRB099 02938 JLK 22946 b

1    AN ACT concerning 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
5changing Sections 805-20, 830-30, 830-35, 830-45, and 830-55
6and by adding Article 835 as follows:
 
7    (20 ILCS 3501/805-20)
8    Sec. 805-20. Powers and Duties; Industrial Project
9Insurance Program. The Authority has the power:
10    (a) to insure and make advance commitments to insure all or
11any part of the payments required on the bonds issued or a loan
12made to finance any environmental facility under the Illinois
13Environmental Facilities Financing Act or for any industrial
14project upon such terms and conditions as the Authority may
15prescribe in accordance with this Article. The insurance
16provided by the Authority shall be payable solely from the Fund
17created by Section 805-15 and shall not constitute a debt or
18pledge of the full faith and credit of the State, the
19Authority, or any political subdivision thereof;
20    (b) to enter into insurance contracts, letters of credit or
21any other agreements or contracts with financial institutions
22with respect to the Fund and any bonds or loans insured
23thereunder. Any such agreement or contract may contain terms

 

 

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1and provisions necessary or desirable in connection with the
2program, subject to the requirements established by this Act,
3including without limitation terms and provisions relating to
4loan documentation, review and approval procedures,
5origination and servicing rights and responsibilities, default
6conditions, procedures and obligations with respect to
7insurance contracts made under this Act. The agreements or
8contracts may be executed on an individual, group or master
9contract basis with financial institutions;
10    (c) to charge reasonable fees to defray the cost of
11obtaining letters of credit or other similar documents, other
12than insurance contracts under paragraph (b). Any such fees
13shall be payable by such person, in such amounts and at such
14times as the Authority shall determine, and the amount of the
15fees need not be uniform among the various bonds or loans
16insured;
17    (d) to fix insurance premiums for the insurance of payments
18under the provisions of this Article. Such premiums shall be
19computed as determined by the Authority. Any premiums for the
20insurance of loan payments under the provisions of this Act
21shall be payable by such person, in such amounts and at such
22times as the Authority shall determine, and the amount of the
23premiums need not be uniform among the various bonds or loans
24insured;
25    (e) to establish application fees and prescribe
26application, notification, contract and insurance forms, rules

 

 

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1and regulations it deems necessary or appropriate;
2    (f) to make loans and to issue bonds secured by insurance
3or other agreements authorized by paragraphs (a) and (b) of
4this Section 805-20 and to issue bonds secured by loans that
5are guaranteed by the federal government or agencies thereof;
6    (g) to issue a single bond issue, or a series of bond
7issues, for a group of industrial projects, a group of
8corporations, or a group of business entities or any
9combination thereof insured by insurance or backed by any other
10agreement authorized by paragraphs (a) and (b) of this Section
11or secured by loans that are guaranteed by the federal
12government or agencies thereof;
13    (h) to enter into trust agreements for the management of
14the Fund created under Section 805-15 of this Act;
15    (i) to exercise such other powers as are necessary or
16incidental to the powers granted in this Section and to the
17issuance of State Guarantees under Article 830 of this Act; and
18    (j) at the discretion of the Authority, to insure and make
19advance commitments to insure, and issue State Guarantees for,
20all or any part of the payments required on the bonds issued or
21loans made to finance any agricultural facility, project,
22farmer, producer, agribusiness, qualified veteran-owned small
23business, or program under Article 830 or Article 835 of this
24Act upon such terms and conditions as the Authority may
25prescribe in accordance with this Article. The insurance and
26State Guarantees provided by the Authority may be payable from

 

 

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1the Fund created by Section 805-15 and is in addition to and
2not in replacement of the Illinois Agricultural Loan Guarantee
3Fund and the Illinois Farmer and Agribusiness Loan Guarantee
4Fund created under Article 830 of this Act.
5(Source: P.A. 96-897, eff. 5-24-10; 97-333, eff. 8-12-11.)
 
6    (20 ILCS 3501/830-30)
7    Sec. 830-30. State Guarantees for existing debt.
8    (a) The Authority is authorized to issue State Guarantees
9for farmers' existing debts held by a lender. For the purposes
10of this Section, a farmer shall be a resident of Illinois, who
11is a principal operator of a farm or land, at least 50% of
12whose annual gross income is derived from farming and whose
13debt to asset ratio shall not be less than 40%, except in those
14cases where the applicant has previously used the guarantee
15program there shall be no debt to asset ratio or income
16restriction. For the purposes of this Section, debt to asset
17ratio shall mean the current outstanding liabilities of the
18farmer divided by the current outstanding assets of the farmer.
19The Authority shall establish the maximum permissible debt to
20asset ratio based on criteria established by the Authority.
21Lenders shall apply for the State Guarantees on forms provided
22by the Authority and certify that the application and any other
23documents submitted are true and correct. The lender or
24borrower, or both in combination, shall pay an administrative
25fee as determined by the Authority. The applicant shall be

 

 

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1responsible for paying any fees or charges involved in
2recording mortgages, releases, financing statements, insurance
3for secondary market issues and any other similar fees or
4charges as the Authority may require. The application shall at
5a minimum contain the farmer's name, address, present credit
6and financial information, including cash flow statements,
7financial statements, balance sheets, and any other
8information pertinent to the application, and the collateral to
9be used to secure the State Guarantee. In addition, the lender
10must agree to bring the farmer's debt to a current status at
11the time the State Guarantee is provided and must also agree to
12charge a fixed or adjustable interest rate which the Authority
13determines to be below the market rate of interest generally
14available to the borrower. If both the lender and applicant
15agree, the interest rate on the State Guarantee Loan can be
16converted to a fixed interest rate at any time during the term
17of the loan. Any State Guarantees provided under this Section
18(i) shall not exceed $500,000 per farmer, (ii) shall be set up
19on a payment schedule not to exceed 30 years, and shall be no
20longer than 30 years in duration, and (iii) shall be subject to
21an annual review and renewal by the lender and the Authority;
22provided that only one such State Guarantee shall be
23outstanding per farmer at any one time. No State Guarantee
24shall be revoked by the Authority without a 90-day notice, in
25writing, to all parties. In those cases where the borrower has
26not previously used the guarantee program, the lender shall not

 

 

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1call due any loan during the first 3 years for any reason
2except for lack of performance or insufficient collateral. The
3lender can review and withdraw or continue with the State
4Guarantee on an annual basis after the first 3 years of the
5loan, provided a 90-day notice, in writing, to all parties has
6been given.
7    (b) The Authority shall provide or renew a State Guarantee
8to a lender if:
9        (i) A fee equal to 25 basis points on the loan is paid
10    to the Authority on an annual basis by the lender.
11        (ii) The application provides collateral acceptable to
12    the Authority that is at least equal to the State's portion
13    of the Guarantee to be provided.
14        (iii) The lender assumes all responsibility and costs
15    for pursuing legal action on collecting any loan that is
16    delinquent or in default.
17        (iv) The lender is responsible for the first 15% of the
18    outstanding principal of the note for which the State
19    Guarantee has been applied.
20    (c) There is hereby created outside of the State treasury a
21special fund to be known as the Illinois Agricultural Loan
22Guarantee Fund. The State Treasurer shall be custodian of this
23Fund. Any amounts in the Illinois Agricultural Loan Guarantee
24Fund not currently needed to meet the obligations of the Fund
25shall be invested as provided by law, and all interest earned
26from these investments shall be deposited into the Fund until

 

 

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1the Fund reaches the maximum amount authorized in this Act;
2thereafter, interest earned shall be deposited into the General
3Revenue Fund. After September 1, 1989, annual investment
4earnings equal to 1.5% of the Fund shall remain in the Fund to
5be used for the purposes established in Section 830-40 of this
6Act. The Authority is authorized to transfer to the Fund such
7amounts as are necessary to satisfy claims during the duration
8of the State Guarantee program to secure State Guarantees
9issued under this Section, provided that amounts to be paid
10from the Industrial Project Insurance Fund created under
11Article 805 of this Act may be paid by the Authority directly
12to satisfy claims and need not be deposited first into the
13Illinois Agricultural Loan Guarantee Fund. If for any reason
14the General Assembly fails to make an appropriation sufficient
15to meet these obligations, this Act shall constitute an
16irrevocable and continuing appropriation of an amount
17necessary to secure guarantees as defaults occur and the
18irrevocable and continuing authority for, and direction to, the
19State Treasurer and the Comptroller to make the necessary
20transfers to the Illinois Agricultural Loan Guarantee Fund, as
21directed by the Governor, out of the General Revenue Fund.
22Within 30 days after November 15, 1985, the Authority may
23transfer up to $7,000,000 from available appropriations into
24the Illinois Agricultural Loan Guarantee Fund for the purposes
25of this Act. Thereafter, the Authority may transfer additional
26amounts into the Illinois Agricultural Loan Guarantee Fund to

 

 

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1secure guarantees for defaults as defaults occur. In the event
2of default by the farmer, the lender shall be entitled to, and
3the Authority shall direct payment on, the State Guarantee
4after 90 days of delinquency. All payments by the Authority
5shall be made from the Illinois Agricultural Loan Guarantee
6Fund to satisfy claims against the State Guarantee shall be
7made, in whole or in part, from any of the following funds in
8such order and in such amounts as the Authority shall
9determine: (1) the Industrial Project Insurance Fund created
10under Article 805 of this Act (if the Authority exercises its
11discretion under subsection (j) of Section 805-20); (2) the
12Illinois Agricultural Loan Guarantee Fund; or (3) the Illinois
13Farmer and Agribusiness Loan Guarantee Fund. The Illinois
14Agricultural Loan Guarantee Fund shall guarantee receipt of
15payment of the 85% of the principal and interest owed on the
16State Guarantee Loan by the farmer to the guarantee holder,
17provided that payments by the Authority to satisfy claims
18against the State Guarantee shall be made in accordance with
19the preceding sentence. It shall be the responsibility of the
20lender to proceed with the collecting and disposing of
21collateral on the State Guarantee under this Section, Section
22830-35, Section 830-45, Section 830-50, Section 830-55, or
23Article 835 within 14 months of the time the State Guarantee is
24declared delinquent; provided, however, that the lender shall
25not collect or dispose of collateral on the State Guarantee
26without the express written prior approval of the Authority. If

 

 

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1the lender does not dispose of the collateral within 14 months,
2the lender shall be liable to repay to the State interest on
3the State Guarantee equal to the same rate which the lender
4charges on the State Guarantee; provided, however, that the
5Authority may extend the 14-month period for a lender in the
6case of bankruptcy or extenuating circumstances. The Fund from
7which a payment is made shall be reimbursed for any amounts
8paid from that Fund under this Section, Section 830-35, Section
9830-45, Section 830-50, Section 830-55, or Article 835 upon
10liquidation of the collateral. The Authority, by resolution of
11the Board, may borrow sums from the Fund and provide for
12repayment as soon as may be practical upon receipt of payments
13of principal and interest by a farmer. Money may be borrowed
14from the Fund by the Authority for the sole purpose of paying
15certain interest costs for farmers associated with selling a
16loan subject to a State Guarantee in a secondary market as may
17be deemed reasonable and necessary by the Authority.
18    (d) Notwithstanding the provisions of this Section 830-30
19with respect to the farmers and lenders who may obtain State
20Guarantees, the Authority may promulgate rules establishing
21the eligibility of farmers and lenders to participate in the
22State guarantee program and the terms, standards, and
23procedures that will apply, when the Authority finds that
24emergency conditions in Illinois agriculture have created the
25need for State Guarantees pursuant to terms, standards, and
26procedures other than those specified in this Section.

 

 

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1(Source: P.A. 93-205, eff. 1-1-04.)
 
2    (20 ILCS 3501/830-35)
3    Sec. 830-35. State Guarantees for loans to farmers and
4agribusiness; eligibility.
5    (a) The Authority is authorized to issue State Guarantees
6to lenders for loans to eligible farmers and agribusinesses for
7purposes set forth in this Section. For purposes of this
8Section, an eligible farmer shall be a resident of Illinois (i)
9who is principal operator of a farm or land, at least 50% of
10whose annual gross income is derived from farming, (ii) whose
11annual total sales of agricultural products, commodities, or
12livestock exceeds $20,000, and (iii) whose net worth does not
13exceed $500,000. An eligible agribusiness shall be that as
14defined in Section 801-10 of this Act. The Authority may
15approve applications by farmers and agribusinesses that
16promote diversification of the farm economy of this State
17through the growth and development of new crops or livestock
18not customarily grown or produced in this State or that
19emphasize a vertical integration of grain or livestock produced
20or raised in this State into a finished agricultural product
21for consumption or use. "New crops or livestock not customarily
22grown or produced in this State" shall not include corn,
23soybeans, wheat, swine, or beef or dairy cattle. "Vertical
24integration of grain or livestock produced or raised in this
25State" shall include any new or existing grain or livestock

 

 

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1grown or produced in this State. Lenders shall apply for the
2State Guarantees on forms provided by the Authority, certify
3that the application and any other documents submitted are true
4and correct, and pay an administrative fee as determined by the
5Authority. The applicant shall be responsible for paying any
6fees or charges involved in recording mortgages, releases,
7financing statements, insurance for secondary market issues
8and any other similar fees or charges as the Authority may
9require. The application shall at a minimum contain the
10farmer's or agribusiness' name, address, present credit and
11financial information, including cash flow statements,
12financial statements, balance sheets, and any other
13information pertinent to the application, and the collateral to
14be used to secure the State Guarantee. In addition, the lender
15must agree to charge an interest rate, which may vary, on the
16loan that the Authority determines to be below the market rate
17of interest generally available to the borrower. If both the
18lender and applicant agree, the interest rate on the State
19Guarantee Loan can be converted to a fixed interest rate at any
20time during the term of the loan. Any State Guarantees provided
21under this Section (i) shall not exceed $500,000 per farmer or
22an amount as determined by the Authority on a case-by-case
23basis for an agribusiness, (ii) shall not exceed a term of 15
24years, and (iii) shall be subject to an annual review and
25renewal by the lender and the Authority; provided that only one
26such State Guarantee shall be made per farmer or agribusiness,

 

 

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1except that additional State Guarantees may be made for
2purposes of expansion of projects financed in part by a
3previously issued State Guarantee. No State Guarantee shall be
4revoked by the Authority without a 90-day notice, in writing,
5to all parties. The lender shall not call due any loan for any
6reason except for lack of performance, insufficient
7collateral, or maturity. A lender may review and withdraw or
8continue with a State Guarantee on an annual basis after the
9first 5 years following closing of the loan application if the
10loan contract provides for an interest rate that shall not
11vary. A lender shall not withdraw a State Guarantee if the loan
12contract provides for an interest rate that may vary, except
13for reasons set forth herein.
14    (b) The Authority shall provide or renew a State Guarantee
15to a lender if:
16        (i) A fee equal to 25 basis points on the loan is paid
17    to the Authority on an annual basis by the lender.
18        (ii) The application provides collateral acceptable to
19    the Authority that is at least equal to the State's portion
20    of the Guarantee to be provided.
21        (iii) The lender assumes all responsibility and costs
22    for pursuing legal action on collecting any loan that is
23    delinquent or in default.
24        (iv) The lender is responsible for the first 15% of the
25    outstanding principal of the note for which the State
26    Guarantee has been applied.

 

 

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1    (c) There is hereby created outside of the State treasury a
2special fund to be known as the Illinois Farmer and
3Agribusiness Loan Guarantee Fund. The State Treasurer shall be
4custodian of this Fund. Any amounts in the Fund not currently
5needed to meet the obligations of the Fund shall be invested as
6provided by law, and all interest earned from these investments
7shall be deposited into the Fund until the Fund reaches the
8maximum amounts authorized in this Act; thereafter, interest
9earned shall be deposited into the General Revenue Fund. After
10September 1, 1989, annual investment earnings equal to 1.5% of
11the Fund shall remain in the Fund to be used for the purposes
12established in Section 830-40 of this Act. The Authority is
13authorized to transfer such amounts as are necessary to satisfy
14claims from available appropriations and from fund balances of
15the Farm Emergency Assistance Fund as of June 30 of each year
16to the Illinois Farmer and Agribusiness Loan Guarantee Fund to
17secure State Guarantees issued under this Section, and Sections
18830-30, 830-45, 830-50, and 830-55, and Article 835 of this
19Act. Amounts to be paid from the Industrial Project Insurance
20Fund created under Article 805 of this Act may be paid by the
21Authority directly to satisfy claims and need not be deposited
22first into the Illinois Farmer and Agribusiness Loan Guarantee
23Fund. If for any reason the General Assembly fails to make an
24appropriation sufficient to meet these obligations, this Act
25shall constitute an irrevocable and continuing appropriation
26of an amount necessary to secure guarantees as defaults occur

 

 

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1and the irrevocable and continuing authority for, and direction
2to, the State Treasurer and the Comptroller to make the
3necessary transfers to the Illinois Farmer and Agribusiness
4Loan Guarantee Fund, as directed by the Governor, out of the
5General Revenue Fund. In the event of default by the borrower
6on State Guarantee Loans under this Section, Section 830-45,
7Section 830-50, or Section 830-55, the lender shall be entitled
8to, and the Authority shall direct payment on, the State
9Guarantee after 90 days of delinquency. All payments by the
10Authority shall be made from the Illinois Farmer and
11Agribusiness Loan Guarantee Fund to satisfy claims against the
12State Guarantee shall be made, in whole or in part, from any of
13the following funds in such order and in such amounts as the
14Authority shall determine: (1) the Industrial Project
15Insurance Fund created under Article 805 of this Act (if the
16Authority exercises its discretion under subsection (j) of
17Section 805-20); (2) the Illinois Farmer and Agribusiness Loan
18Guarantee Fund; or (3) the Illinois Farmer and Agribusiness
19Loan Guarantee Fund. It shall be the responsibility of the
20lender to proceed with the collecting and disposing of
21collateral on the State Guarantee under this Section, Section
22830-45, Section 830-50, or Section 830-55 within 14 months of
23the time the State Guarantee is declared delinquent. If the
24lender does not dispose of the collateral within 14 months, the
25lender shall be liable to repay to the State interest on the
26State Guarantee equal to the same rate that the lender charges

 

 

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1on the State Guarantee, provided that the Authority shall have
2the authority to extend the 14-month period for a lender in the
3case of bankruptcy or extenuating circumstances. The Fund shall
4be reimbursed for any amounts paid under this Section, Section
5830-30, Section 830-45, Section 830-50, or Section 830-55, or
6Article 835 upon liquidation of the collateral. The Authority,
7by resolution of the Board, may borrow sums from the Fund and
8provide for repayment as soon as may be practical upon receipt
9of payments of principal and interest by a borrower on State
10Guarantee Loans under this Section, Section 830-30, Section
11830-45, Section 830-50, or Section 830-55, or Article 835.
12Money may be borrowed from the Fund by the Authority for the
13sole purpose of paying certain interest costs for borrowers
14associated with selling a loan subject to a State Guarantee
15under this Section, Section 830-30, Section 830-45, Section
16830-50, or Section 830-55, or Article 835 in a secondary market
17as may be deemed reasonable and necessary by the Authority.
18    (d) Notwithstanding the provisions of this Section 830-35
19with respect to the farmers, agribusinesses, and lenders who
20may obtain State Guarantees, the Authority may promulgate rules
21establishing the eligibility of farmers, agribusinesses, and
22lenders to participate in the State Guarantee program and the
23terms, standards, and procedures that will apply, when the
24Authority finds that emergency conditions in Illinois
25agriculture have created the need for State Guarantees pursuant
26to terms, standards, and procedures other than those specified

 

 

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1in this Section.
2(Source: P.A. 96-897, eff. 5-24-10.)
 
3    (20 ILCS 3501/830-45)
4    Sec. 830-45. Young Farmer Loan Guarantee Program.
5    (a) The Authority is authorized to issue State Guarantees
6to lenders for loans to finance or refinance debts of young
7farmers. For the purposes of this Section, a young farmer is a
8resident of Illinois who is at least 18 years of age and who is
9a principal operator of a farm or land, who derives at least
1050% of annual gross income from farming, whose net worth is not
11less than $10,000 and whose debt to asset ratio is not less
12than 40%. For the purposes of this Section, debt to asset ratio
13means current outstanding liabilities, including any debt to be
14financed or refinanced under this Section 830-45, divided by
15current outstanding assets. The Authority shall establish the
16maximum permissible debt to asset ratio based on criteria
17established by the Authority. Lenders shall apply for the State
18Guarantees on forms provided by the Authority and certify that
19the application and any other documents submitted are true and
20correct. The lender or borrower, or both in combination, shall
21pay an administrative fee as determined by the Authority. The
22applicant shall be responsible for paying any fee or charge
23involved in recording mortgages, releases, financing
24statements, insurance for secondary market issues, and any
25other similar fee or charge that the Authority may require. The

 

 

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1application shall at a minimum contain the young farmer's name,
2address, present credit and financial information, including
3cash flow statements, financial statements, balance sheets,
4and any other information pertinent to the application, and the
5collateral to be used to secure the State Guarantee. In
6addition, the borrower must certify to the Authority that, at
7the time the State Guarantee is provided, the borrower will not
8be delinquent in the repayment of any debt. The lender must
9agree to charge a fixed or adjustable interest rate that the
10Authority determines to be below the market rate of interest
11generally available to the borrower. If both the lender and
12applicant agree, the interest rate on the State guaranteed loan
13can be converted to a fixed interest rate at any time during
14the term of the loan. State Guarantees provided under this
15Section (i) shall not exceed $500,000 per young farmer, (ii)
16shall be set up on a payment schedule not to exceed 30 years,
17but shall be no longer than 15 years in duration, and (iii)
18shall be subject to an annual review and renewal by the lender
19and the Authority. A young farmer may use this program more
20than once provided the aggregate principal amount of State
21Guarantees under this Section to that young farmer does not
22exceed $500,000. No State Guarantee shall be revoked by the
23Authority without a 90-day notice, in writing, to all parties.
24    (b) The Authority shall provide or renew a State Guarantee
25to a lender if:
26        (i) The lender pays a fee equal to 25 basis points on

 

 

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1    the loan to the Authority on an annual basis.
2        (ii) The application provides collateral acceptable to
3    the Authority that is at least equal to the State
4    Guarantee.
5        (iii) The lender assumes all responsibility and costs
6    for pursuing legal action on collecting any loan that is
7    delinquent or in default.
8        (iv) The lender is at risk for the first 15% of the
9    outstanding principal of the note for which the State
10    Guarantee is provided.
11    (c) The Illinois Agricultural Loan Guarantee Fund, and the
12Illinois Farmer and Agribusiness Loan Guarantee Fund, and the
13Industrial Project Insurance Fund may be used to secure State
14Guarantees issued under this Section as provided in Section
15830-30, and Section 830-35, and subsection (j) of Section
16805-20, respectively. All payments by the Authority to satisfy
17claims against the State Guarantee shall be made, in whole or
18in part, from any of the following funds in such order and in
19such amounts as the Authority shall determine: (1) the
20Industrial Project Insurance Fund (if the Authority exercises
21its discretion under subsection (j) of Section 805-20); (2) the
22Illinois Agricultural Loan Guarantee Fund; or (3) the Illinois
23Farmer and Agribusiness Loan Guarantee Fund.
24    (d) Notwithstanding the provisions of this Section 830-45
25with respect to the young farmers and lenders who may obtain
26State Guarantees, the Authority may promulgate rules

 

 

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1establishing the eligibility of young farmers and lenders to
2participate in the State Guarantee program and the terms,
3standards, and procedures that will apply, when the Authority
4finds that emergency conditions in Illinois agriculture have
5created the need for State Guarantees pursuant to terms,
6standards, and procedures other than those specified in this
7Section.
8(Source: P.A. 96-897, eff. 5-24-10.)
 
9    (20 ILCS 3501/830-55)
10    Sec. 830-55. Working Capital Loan Guarantee Program.
11    (a) The Authority is authorized to issue State Guarantees
12to lenders for loans to finance needed input costs related to
13and in connection with planting and raising agricultural crops
14and commodities in Illinois. Eligible input costs include, but
15are not limited to, fertilizer, chemicals, feed, seed, fuel,
16parts, and repairs. At the discretion of the Authority, the
17farmer, producer, or agribusiness must be able to provide the
18originating lender with a first lien on the proposed crop or
19commodity to be raised and an assignment of Federal Crop
20Insurance sufficient to secure the Working Capital Loan.
21Additional collateral may be required as deemed necessary by
22the lender and the Authority.
23    For the purposes of this Section, an eligible farmer,
24producer, or agribusiness is a resident of Illinois who is at
25least 18 years of age and who is a principal operator of a farm

 

 

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1or land, who derives at least 50% of annual gross income from
2farming, and whose debt to asset ratio is not less than 40%.
3For the purposes of this Section, debt to asset ratio means
4current outstanding liabilities, including any debt to be
5financed or refinanced under this Section 830-55, divided by
6current outstanding assets. The Authority shall establish the
7maximum permissible debt to asset ratio based on criteria
8established by the Authority. Lenders shall apply for the State
9Guarantees on forms provided by the Authority and certify that
10the application and any other documents submitted are true and
11correct. The lender or borrower, or both in combination, shall
12pay an administrative fee as determined by the Authority. The
13applicant shall be responsible for paying any fee or charge
14involved in recording mortgages, releases, financing
15statements, insurance for secondary market issues, and any
16other similar fee or charge that the Authority may require. The
17application shall at a minimum contain the borrower's name,
18address, present credit and financial information, including
19cash flow statements, financial statements, balance sheets,
20and any other information pertinent to the application, and the
21collateral to be used to secure the State Guarantee. In
22addition, the borrower must certify to the Authority that, at
23the time the State Guarantee is provided, the borrower will not
24be delinquent in the repayment of any debt. The lender must
25agree to charge a fixed or adjustable interest rate that the
26Authority determines to be below the market rate of interest

 

 

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1generally available to the borrower. If both the lender and
2applicant agree, the interest rate on the State guaranteed loan
3can be converted to a fixed interest rate at any time during
4the term of the loan. State Guarantees provided under this
5Section (i) shall not exceed $250,000 per borrower, (ii) shall
6be repaid annually, and (iii) shall be subject to an annual
7review and renewal by the lender and the Authority. The State
8Guarantee may be renewed annually, for a period not to exceed 3
9total years per State Guarantee, if the borrower meets
10financial criteria and other conditions, as established by the
11Authority. A farmer or agribusiness may use this program more
12than once provided the aggregate principal amount of State
13Guarantees under this Section to that farmer or agribusiness
14does not exceed $250,000 annually. No State Guarantee shall be
15revoked by the Authority without a 90-day notice, in writing,
16to all parties.
17    (b) The Authority shall provide a State Guarantee to a
18lender if:
19        (i) The borrower pays to the Authority a fee equal to
20    100 basis points on the loan.
21        (ii) The application provides collateral acceptable to
22    the Authority that is at least equal to the State
23    Guarantee.
24        (iii) The lender assumes all responsibility and costs
25    for pursuing legal action on collecting any loan that is
26    delinquent or in default.

 

 

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1        (iv) The lender is at risk for the first 15% of the
2    outstanding principal of the note for which the State
3    Guarantee is provided.
4    (c) The Illinois Agricultural Loan Guarantee Fund, and the
5Illinois Farmer and Agribusiness Loan Guarantee Fund, and the
6Industrial Project Insurance Fund may be used to secure State
7Guarantees issued under this Section as provided in Section
8830-30, and Section 830-35, and subsection (j) of Section
9805-20, respectively. If the Authority exercises its
10discretion under subsection (j) of Section 805-20 to secure a
11State Guarantee with the Industrial Project Insurance Fund and
12also exercises its discretion under this subsection to secure
13the same State Guarantee with the Illinois Agricultural Loan
14Guarantee Fund, the Illinois Farmer and Agribusiness Loan
15Guarantee Fund, or both, all payments by the Authority to
16satisfy claims against the State Guarantee shall be made from
17the Industrial Project Insurance Fund, the Illinois
18Agricultural Loan Guarantee Fund, or the Illinois Farmer and
19Agribusiness Loan Guarantee Fund, as applicable, in such order
20and in such amounts as the Authority shall determine.
21    (d) Notwithstanding the provisions of this Section 830-55
22with respect to the borrowers and lenders who may obtain State
23Guarantees, the Authority may promulgate rules establishing
24the eligibility of borrowers and lenders to participate in the
25State Guarantee program and the terms, standards, and
26procedures that will apply, when the Authority finds that

 

 

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1emergency conditions in Illinois agriculture have created the
2need for State Guarantees pursuant to terms, standards, and
3procedures other than those specified in this Section.
4(Source: P.A. 96-897, eff. 5-24-10.)
 
5    (20 ILCS 3501/Art. 835 heading new)
6
ARTICLE 835. VETERANS ASSISTANCE

 
7    (20 ILCS 3501/835-5 new)
8    Sec. 835-5. Legislative findings. The General Assembly
9hereby finds and declares the following: (i) that there is an
10inadequate supply of funds available in this State at rates
11sufficiently low to enable veterans to own and operate small
12businesses successfully in this State; (ii) such an inadequate
13supply of funds makes the transition of veterans from service
14in the armed forces of the United States to civilian life more
15difficult and results in increased unemployment of veterans and
16its attendant problems; (iii) that there have been recurrent
17shortages of funds available to small businesses owned and
18operated by veterans in this State from private market sources
19at reasonable interest rates; and (iv) that the ordinary
20operations of private enterprise have not in the past corrected
21these conditions.
 
22    (20 ILCS 3501/835-10 new)
23    Sec. 835-10. Definitions. As used or referred to in this

 

 

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1Article 835, the following words and terms shall have the
2following meanings, except where the context clearly requires
3otherwise:
4    "Fund" means one or more of the Industrial Project
5Insurance Fund, the Illinois Agricultural Loan Guarantee Fund,
6or the Illinois Farmer and Agribusiness Loan Guarantee Fund, as
7applicable.
8    "Illinois Agricultural Loan Guarantee Fund" means the
9Illinois Agricultural Loan Guarantee Fund created under
10Section 830-30(c) of this Act.
11    "Illinois Farmer and Agribusiness Loan Guarantee Fund"
12means the Illinois Farmer and Agribusiness Loan Guarantee Fund
13created under Section 830-35(c) of this Act.
14    "Industrial Project Insurance Fund" means the Industrial
15Project Insurance Fund created under Section 805-15 of this
16Act.
17    "Qualified veteran-owned small business" has the meaning
18provided in subsection (e) of Section 45-57 of the Illinois
19Procurement Code.
 
20    (20 ILCS 3501/835-15 new)
21    Sec. 835-15. Powers and duties. The Authority may enter
22into a State Guarantee with a lender, or a person holding a
23note, of a loan or loans to a qualified veteran-owned small
24business and may make payment, in whole or in part, on a State
25Guarantee from any of the following funds in such order and in

 

 

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1such amounts as the Authority shall determine: (1) the
2Industrial Project Insurance Fund (if the Authority exercises
3its discretion under subsection (j) of Section 805-20); (2) the
4Illinois Agricultural Loan Guarantee Fund; or (3) the Illinois
5Farmer and Agribusiness Loan Guarantee Fund.
 
6    (20 ILCS 3501/835-20 new)
7    Sec. 835-20. State Guarantees for loans to qualified
8veteran-owned small businesses.
9    (a) The Authority is authorized to issue State Guarantees
10to lenders for loans to qualified veteran-owned small
11businesses for the general corporate purposes of those
12qualified veteran-owned small businesses. Lenders shall apply
13for the State Guarantees on forms provided by the Authority,
14certify that the application and any other documents submitted
15are true and correct, and pay an administrative fee as
16determined by the Authority. The applicant shall be responsible
17for paying any fees or charges involved in recording mortgages,
18releases, and financing statements, and any other similar fees
19or charges as the Authority may require. The application shall,
20at a minimum, contain the name, address, present credit and
21financial information, including cash flow statements,
22financial statements, and balance sheets, of the qualified
23veteran-owned small business, any other information pertinent
24to the application, and the collateral to be used to secure the
25State Guarantee.

 

 

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1    In addition, the lender must agree to charge an interest
2rate, which may vary, on the loan that the Authority determines
3to be below the market rate of interest generally available to
4the borrower. If both the lender and applicant agree, the
5interest rate on the loan subject to a State Guarantee can be
6converted to a fixed interest rate at any time during the term
7of the loan. Any State Guarantees provided under this Section
8shall (i) not exceed $500,000 per qualified veteran-owned small
9business, (ii) not exceed a term of 15 years, and (iii) be
10subject to an annual review and renewal by the lender and the
11Authority; provided that only one such State Guarantee shall be
12made per qualified veteran-owned small business, except that
13additional State Guarantees may be made for purposes of
14expansion of projects financed in part by a previously issued
15State Guarantee. No State Guarantee shall be revoked by the
16Authority without a 90-day notice, in writing, to all parties.
17The lender shall not call due any loan for any reason except
18for lack of performance, insufficient collateral, or maturity.
19A lender may review and withdraw or continue with a State
20Guarantee on an annual basis after the first 5 years following
21closing of the loan application if the loan contract provides
22for an interest rate that does not vary. A lender shall not
23withdraw a State Guarantee if the loan contract provides for an
24interest rate that may vary, except for reasons set forth in
25this Section.
26    (b) The Authority shall provide or renew a State Guarantee

 

 

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1to a lender if:
2        (1) a fee equal to 25 basis points on the loan is paid
3    to the Authority on an annual basis by the lender;
4        (2) 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        (3) the lender assumes all responsibility and costs for
8    pursuing legal action on collecting any loan that is
9    delinquent or in default; and
10        (4) the lender is responsible for the first 15% of the
11    outstanding principal of the note for which the State
12    Guarantee has been applied.
13    (c) If, for any reason, the General Assembly fails to make
14an appropriation sufficient to meet the obligations under a
15State Guarantee, this Act shall constitute an irrevocable and
16continuing appropriation of an amount necessary to secure
17guarantees as defaults occur and the irrevocable and continuing
18authority for, and direction to, the State Treasurer and the
19Comptroller to make the necessary transfers to the Industrial
20Project Insurance Fund, the Illinois Agricultural Loan
21Guarantee Fund, or the Illinois Farmer and Agribusiness Loan
22Guarantee Fund, or any combination of those funds, as directed
23by the Governor, out of the General Revenue Fund. In the event
24of a default by the borrower on a loan subject to a State
25Guarantee under this Section, Section 830-30, Section 830-35,
26Section 830-45, Section 830-50, or Section 83055, the lender

 

 

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1shall be entitled to, and the Authority shall direct payment
2on, the State Guarantee after 90 days of delinquency. Payments
3by the Authority to satisfy claims against the State Guarantee
4shall be made, in whole or in part, from any of the following
5funds in such order and in such amounts as the Authority shall
6determine: (1) the Industrial Project Insurance Fund created
7under Article 805 of this Act (if the Authority exercises its
8discretion under subsection (j) of Section 805-20); (2) the
9Illinois Farmer and Agribusiness Loan Guarantee Fund; or (3)
10the Illinois Agricultural Loan Guarantee Fund. It shall be the
11responsibility of the lender to proceed with collecting and
12disposing of collateral on the State Guarantee under this
13Section within 14 months after the State Guarantee is declared
14delinquent. If the lender does not dispose of the collateral
15within that 14-month period, the lender shall be liable to
16repay to the State interest on the State Guarantee at a rate
17equal to the same rate that the lender charges on the State
18Guarantee, provided that the Authority shall have the authority
19to extend the 14-month period for a lender in the case of
20bankruptcy or extenuating circumstances. The applicable fund
21or funds shall be reimbursed for any amounts paid under this
22Section, Section 830-30, Section 830-35, Section 830-45,
23Section 830-50, or Section 830-55 upon liquidation of the
24collateral. The Authority, by resolution of the Board, may
25borrow sums from a fund or funds and provide for repayment as
26soon as may be practical upon receipt of payments of principal

 

 

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1and interest by a borrower on loans subject to a State
2Guarantee under this Section, Section 830-30, Section 830-35,
3Section 830-45, Section 830-50, or Section 830-55. Money may be
4borrowed from the Fund by the Authority for the sole purpose of
5paying certain interest costs for borrowers associated with
6selling a loan subject to a State Guarantee under this Section,
7Section 83030, Section 83035, Section 830-45, Section
8830-50, or Section 830-55 in a secondary market as may be
9deemed reasonable and necessary by the Authority.
10    (d) Notwithstanding the provisions of this Section with
11respect to the qualified veteran-owned small businesses and
12lenders who may obtain State Guarantees, the Authority may
13adopt rules establishing the eligibility of qualified
14veteran-owned small businesses and lenders to participate in
15the State Guarantee program and the terms, standards, and
16procedures that will apply, if the Authority finds that
17emergency conditions in Illinois have created the need for
18State Guarantees pursuant to terms, standards, and procedures
19other than those specified in this Section.
 
20    (20 ILCS 3501/835-25 new)
21    Sec. 835-25. Authority administrative expenses. For
22fiscal years 2017 through 2019, the Authority is authorized to
23reimburse itself for the ordinary and necessary expenses of
24administering the State Guarantee program under this Article
25from amounts from time to time available in the Industrial

 

 

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1Project Insurance Fund in amounts not to exceed: (1) $275,000
2in fiscal year 2017; and (2) $200,000 per fiscal year in fiscal
3years 2018 and 2019. Ordinary and necessary expenses of
4administering those State Guarantee programs include, without
5limitation, costs of general administration, staff, accounting
6and auditing services, legal services, judgments, loan
7servicing, realization upon collateral, communications with
8borrowers and lenders, and similar expenses, all to the extent
9reasonably allocable to such State Guarantee programs.
10    This Section is repealed on August 1, 2019.
 
11    Section 99. Effective date. This Act takes effect upon
12becoming law.