Illinois General Assembly - Full Text of SB0324
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Full Text of SB0324  99th General Assembly

SB0324sam001 99TH GENERAL ASSEMBLY

Sen. Jennifer Bertino-Tarrant

Filed: 5/13/2016

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 324

2    AMENDMENT NO. ______. Amend Senate Bill 324 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Finance Authority Act is amended
5by changing 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

 

 

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1created by Section 805-15 and shall not constitute a debt or
2pledge of the full faith and credit of the State, the
3Authority, or any political subdivision thereof;
4    (b) to enter into insurance contracts, letters of credit or
5any other agreements or contracts with financial institutions
6with respect to the Fund and any bonds or loans insured
7thereunder. Any such agreement or contract may contain terms
8and provisions necessary or desirable in connection with the
9program, subject to the requirements established by this Act,
10including without limitation terms and provisions relating to
11loan documentation, review and approval procedures,
12origination and servicing rights and responsibilities, default
13conditions, procedures and obligations with respect to
14insurance contracts made under this Act. The agreements or
15contracts may be executed on an individual, group or master
16contract basis with financial institutions;
17    (c) to charge reasonable fees to defray the cost of
18obtaining letters of credit or other similar documents, other
19than insurance contracts under paragraph (b). Any such fees
20shall be payable by such person, in such amounts and at such
21times as the Authority shall determine, and the amount of the
22fees need not be uniform among the various bonds or loans
23insured;
24    (d) to fix insurance premiums for the insurance of payments
25under the provisions of this Article. Such premiums shall be
26computed as determined by the Authority. Any premiums for the

 

 

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1insurance of loan payments under the provisions of this Act
2shall be payable by such person, in such amounts and at such
3times as the Authority shall determine, and the amount of the
4premiums need not be uniform among the various bonds or loans
5insured;
6    (e) to establish application fees and prescribe
7application, notification, contract and insurance forms, rules
8and regulations it deems necessary or appropriate;
9    (f) to make loans and to issue bonds secured by insurance
10or other agreements authorized by paragraphs (a) and (b) of
11this Section 805-20 and to issue bonds secured by loans that
12are guaranteed by the federal government or agencies thereof;
13    (g) to issue a single bond issue, or a series of bond
14issues, for a group of industrial projects, a group of
15corporations, or a group of business entities or any
16combination thereof insured by insurance or backed by any other
17agreement authorized by paragraphs (a) and (b) of this Section
18or secured by loans that are guaranteed by the federal
19government or agencies thereof;
20    (h) to enter into trust agreements for the management of
21the Fund created under Section 805-15 of this Act;
22    (i) to exercise such other powers as are necessary or
23incidental to the powers granted in this Section and to the
24issuance of State Guarantees under Article 830 of this Act; and
25    (j) at the discretion of the Authority, to insure and make
26advance commitments to insure, and issue State Guarantees for,

 

 

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1all or any part of the payments required on the bonds issued or
2loans made to finance any agricultural facility, project,
3farmer, producer, agribusiness, qualified veteran-owned small
4business, or program under Article 830 or Article 835 of this
5Act upon such terms and conditions as the Authority may
6prescribe in accordance with this Article. The insurance and
7State Guarantees provided by the Authority may be payable from
8the Fund created by Section 805-15 and is in addition to and
9not in replacement of the Illinois Agricultural Loan Guarantee
10Fund and the Illinois Farmer and Agribusiness Loan Guarantee
11Fund created under Article 830 of this Act.
12(Source: P.A. 96-897, eff. 5-24-10; 97-333, eff. 8-12-11.)
 
13    (20 ILCS 3501/830-30)
14    Sec. 830-30. State Guarantees for existing debt.
15    (a) The Authority is authorized to issue State Guarantees
16for farmers' existing debts held by a lender. For the purposes
17of this Section, a farmer shall be a resident of Illinois, who
18is a principal operator of a farm or land, at least 50% of
19whose annual gross income is derived from farming and whose
20debt to asset ratio shall not be less than 40%, except in those
21cases where the applicant has previously used the guarantee
22program there shall be no debt to asset ratio or income
23restriction. For the purposes of this Section, debt to asset
24ratio shall mean the current outstanding liabilities of the
25farmer divided by the current outstanding assets of the farmer.

 

 

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1The Authority shall establish the maximum permissible debt to
2asset ratio based on criteria established by the Authority.
3Lenders shall apply for the State Guarantees on forms provided
4by the Authority and certify that the application and any other
5documents submitted are true and correct. The lender or
6borrower, or both in combination, shall pay an administrative
7fee as determined by the Authority. The applicant shall be
8responsible for paying any fees or charges involved in
9recording mortgages, releases, financing statements, insurance
10for secondary market issues and any other similar fees or
11charges as the Authority may require. The application shall at
12a minimum contain the farmer's name, address, present credit
13and financial information, including cash flow statements,
14financial statements, balance sheets, and any other
15information pertinent to the application, and the collateral to
16be used to secure the State Guarantee. In addition, the lender
17must agree to bring the farmer's debt to a current status at
18the time the State Guarantee is provided and must also agree to
19charge a fixed or adjustable interest rate which the Authority
20determines to be below the market rate of interest generally
21available to the borrower. If both the lender and applicant
22agree, the interest rate on the State Guarantee Loan can be
23converted to a fixed interest rate at any time during the term
24of the loan. Any State Guarantees provided under this Section
25(i) shall not exceed $500,000 per farmer, (ii) shall be set up
26on a payment schedule not to exceed 30 years, and shall be no

 

 

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1longer than 30 years in duration, and (iii) shall be subject to
2an annual review and renewal by the lender and the Authority;
3provided that only one such State Guarantee shall be
4outstanding per farmer at any one time. No State Guarantee
5shall be revoked by the Authority without a 90-day notice, in
6writing, to all parties. In those cases where the borrower has
7not previously used the guarantee program, the lender shall not
8call due any loan during the first 3 years for any reason
9except for lack of performance or insufficient collateral. The
10lender can review and withdraw or continue with the State
11Guarantee on an annual basis after the first 3 years of the
12loan, provided a 90-day notice, in writing, to all parties has
13been given.
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 Agricultural Loan
3Guarantee Fund. The State Treasurer shall be custodian of this
4Fund. Any amounts in the Illinois Agricultural Loan Guarantee
5Fund not currently needed to meet the obligations of the Fund
6shall be invested as provided by law, and all interest earned
7from these investments shall be deposited into the Fund until
8the Fund reaches the maximum amount authorized in this Act;
9thereafter, interest earned shall be deposited into the General
10Revenue Fund. After September 1, 1989, annual investment
11earnings equal to 1.5% of the Fund shall remain in the Fund to
12be used for the purposes established in Section 830-40 of this
13Act. The Authority is authorized to transfer to the Fund such
14amounts as are necessary to satisfy claims during the duration
15of the State Guarantee program to secure State Guarantees
16issued under this Section, provided that amounts to be paid
17from the Industrial Project Insurance Fund created under
18Article 805 of this Act may be paid by the Authority directly
19to satisfy claims and need not be deposited first into the
20Illinois Agricultural Loan Guarantee Fund. If for any reason
21the General Assembly fails to make an appropriation sufficient
22to meet these obligations, this Act shall constitute an
23irrevocable and continuing appropriation of an amount
24necessary to secure guarantees as defaults occur and the
25irrevocable and continuing authority for, and direction to, the
26State Treasurer and the Comptroller to make the necessary

 

 

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1transfers to the Illinois Agricultural Loan Guarantee Fund, as
2directed by the Governor, out of the General Revenue Fund.
3Within 30 days after November 15, 1985, the Authority may
4transfer up to $7,000,000 from available appropriations into
5the Illinois Agricultural Loan Guarantee Fund for the purposes
6of this Act. Thereafter, the Authority may transfer additional
7amounts into the Illinois Agricultural Loan Guarantee Fund to
8secure guarantees for defaults as defaults occur. In the event
9of default by the farmer, the lender shall be entitled to, and
10the Authority shall direct payment on, the State Guarantee
11after 90 days of delinquency. All payments by the Authority
12shall be made from the Illinois Agricultural Loan Guarantee
13Fund to satisfy claims against the State Guarantee shall be
14made, in whole or in part, from any of the following funds in
15such order and in such amounts as the Authority shall
16determine: (1) the Industrial Project Insurance Fund created
17under Article 805 of this Act (if the Authority exercises its
18discretion under subsection (j) of Section 805-20); (2) the
19Illinois Agricultural Loan Guarantee Fund; or (3) the Illinois
20Farmer and Agribusiness Loan Guarantee Fund. The Illinois
21Agricultural Loan Guarantee Fund shall guarantee receipt of
22payment of the 85% of the principal and interest owed on the
23State Guarantee Loan by the farmer to the guarantee holder,
24provided that payments by the Authority to satisfy claims
25against the State Guarantee shall be made in accordance with
26the preceding sentence. It shall be the responsibility of the

 

 

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1lender to proceed with the collecting and disposing of
2collateral on the State Guarantee under this Section, Section
3830-35, Section 830-45, Section 830-50, Section 830-55, or
4Article 835 within 14 months of the time the State Guarantee is
5declared delinquent; provided, however, that the lender shall
6not collect or dispose of collateral on the State Guarantee
7without the express written prior approval of the Authority. If
8the lender does not dispose of the collateral within 14 months,
9the lender shall be liable to repay to the State interest on
10the State Guarantee equal to the same rate which the lender
11charges on the State Guarantee; provided, however, that the
12Authority may extend the 14-month period for a lender in the
13case of bankruptcy or extenuating circumstances. The Fund from
14which a payment is made shall be reimbursed for any amounts
15paid from that Fund under this Section, Section 830-35, Section
16830-45, Section 830-50, Section 830-55, or Article 835 upon
17liquidation of the collateral. The Authority, by resolution of
18the Board, may borrow sums from the Fund and provide for
19repayment as soon as may be practical upon receipt of payments
20of principal and interest by a farmer. Money may be borrowed
21from the Fund by the Authority for the sole purpose of paying
22certain interest costs for farmers associated with selling a
23loan subject to a State Guarantee in a secondary market as may
24be deemed reasonable and necessary by the Authority.
25    (d) Notwithstanding the provisions of this Section 830-30
26with respect to the farmers and lenders who may obtain State

 

 

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1Guarantees, the Authority may promulgate rules establishing
2the eligibility of farmers and lenders to participate in the
3State guarantee program and the terms, standards, and
4procedures that will apply, when the Authority finds that
5emergency conditions in Illinois agriculture have created the
6need for State Guarantees pursuant to terms, standards, and
7procedures other than those specified in this Section.
8(Source: P.A. 93-205, eff. 1-1-04.)
 
9    (20 ILCS 3501/830-35)
10    Sec. 830-35. State Guarantees for loans to farmers and
11agribusiness; eligibility.
12    (a) The Authority is authorized to issue State Guarantees
13to lenders for loans to eligible farmers and agribusinesses for
14purposes set forth in this Section. For purposes of this
15Section, an eligible farmer shall be a resident of Illinois (i)
16who is principal operator of a farm or land, at least 50% of
17whose annual gross income is derived from farming, (ii) whose
18annual total sales of agricultural products, commodities, or
19livestock exceeds $20,000, and (iii) whose net worth does not
20exceed $500,000. An eligible agribusiness shall be that as
21defined in Section 801-10 of this Act. The Authority may
22approve applications by farmers and agribusinesses that
23promote diversification of the farm economy of this State
24through the growth and development of new crops or livestock
25not customarily grown or produced in this State or that

 

 

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1emphasize a vertical integration of grain or livestock produced
2or raised in this State into a finished agricultural product
3for consumption or use. "New crops or livestock not customarily
4grown or produced in this State" shall not include corn,
5soybeans, wheat, swine, or beef or dairy cattle. "Vertical
6integration of grain or livestock produced or raised in this
7State" shall include any new or existing grain or livestock
8grown or produced in this State. Lenders shall apply for the
9State Guarantees on forms provided by the Authority, certify
10that the application and any other documents submitted are true
11and correct, and pay an administrative fee as determined by the
12Authority. The applicant shall be responsible for paying any
13fees or charges involved in recording mortgages, releases,
14financing statements, insurance for secondary market issues
15and any other similar fees or charges as the Authority may
16require. The application shall at a minimum contain the
17farmer's or agribusiness' name, address, present credit and
18financial information, including cash flow statements,
19financial statements, balance sheets, and any other
20information pertinent to the application, and the collateral to
21be used to secure the State Guarantee. In addition, the lender
22must agree to charge an interest rate, which may vary, on the
23loan that the Authority determines to be below the market rate
24of interest generally available to the borrower. If both the
25lender and applicant agree, the interest rate on the State
26Guarantee Loan can be converted to a fixed interest rate at any

 

 

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1time during the term of the loan. Any State Guarantees provided
2under this Section (i) shall not exceed $500,000 per farmer or
3an amount as determined by the Authority on a case-by-case
4basis for an agribusiness, (ii) shall not exceed a term of 15
5years, and (iii) shall be subject to an annual review and
6renewal by the lender and the Authority; provided that only one
7such State Guarantee shall be made per farmer or agribusiness,
8except that additional State Guarantees may be made for
9purposes of expansion of projects financed in part by a
10previously issued State Guarantee. No State Guarantee shall be
11revoked by the Authority without a 90-day notice, in writing,
12to all parties. The lender shall not call due any loan for any
13reason except for lack of performance, insufficient
14collateral, or maturity. A lender may review and withdraw or
15continue with a State Guarantee on an annual basis after the
16first 5 years following closing of the loan application if the
17loan contract provides for an interest rate that shall not
18vary. A lender shall not withdraw a State Guarantee if the loan
19contract provides for an interest rate that may vary, except
20for reasons set forth herein.
21    (b) The Authority shall provide or renew a State Guarantee
22to a lender if:
23        (i) A fee equal to 25 basis points on the loan is paid
24    to the Authority on an annual basis by the lender.
25        (ii) The application provides collateral acceptable to
26    the Authority that is at least equal to the State's portion

 

 

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1    of the Guarantee to be provided.
2        (iii) The lender assumes all responsibility and costs
3    for pursuing legal action on collecting any loan that is
4    delinquent or in default.
5        (iv) The lender is responsible for the first 15% of the
6    outstanding principal of the note for which the State
7    Guarantee has been applied.
8    (c) There is hereby created outside of the State treasury a
9special fund to be known as the Illinois Farmer and
10Agribusiness Loan Guarantee Fund. The State Treasurer shall be
11custodian of this Fund. Any amounts in the Fund not currently
12needed to meet the obligations of the Fund shall be invested as
13provided by law, and all interest earned from these investments
14shall be deposited into the Fund until the Fund reaches the
15maximum amounts authorized in this Act; thereafter, interest
16earned shall be deposited into the General Revenue Fund. After
17September 1, 1989, annual investment earnings equal to 1.5% of
18the Fund shall remain in the Fund to be used for the purposes
19established in Section 830-40 of this Act. The Authority is
20authorized to transfer such amounts as are necessary to satisfy
21claims from available appropriations and from fund balances of
22the Farm Emergency Assistance Fund as of June 30 of each year
23to the Illinois Farmer and Agribusiness Loan Guarantee Fund to
24secure State Guarantees issued under this Section, and Sections
25830-30, 830-45, 830-50, and 830-55, and Article 835 of this
26Act. Amounts to be paid from the Industrial Project Insurance

 

 

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1Fund created under Article 805 of this Act may be paid by the
2Authority directly to satisfy claims and need not be deposited
3first into the Illinois Farmer and Agribusiness Loan Guarantee
4Fund. If for any reason the General Assembly fails to make an
5appropriation sufficient to meet these obligations, this Act
6shall constitute an irrevocable and continuing appropriation
7of an amount necessary to secure guarantees as defaults occur
8and the irrevocable and continuing authority for, and direction
9to, the State Treasurer and the Comptroller to make the
10necessary transfers to the Illinois Farmer and Agribusiness
11Loan Guarantee Fund, as directed by the Governor, out of the
12General Revenue Fund. In the event of default by the borrower
13on State Guarantee Loans under this Section, Section 830-45,
14Section 830-50, or Section 830-55, the lender shall be entitled
15to, and the Authority shall direct payment on, the State
16Guarantee after 90 days of delinquency. All payments by the
17Authority shall be made from the Illinois Farmer and
18Agribusiness Loan Guarantee Fund to satisfy claims against the
19State Guarantee shall be made, in whole or in part, from any of
20the following funds in such order and in such amounts as the
21Authority shall determine: (1) the Industrial Project
22Insurance Fund created under Article 805 of this Act (if the
23Authority exercises its discretion under subsection (j) of
24Section 805-20); (2) the Illinois Farmer and Agribusiness Loan
25Guarantee Fund; or (3) the Illinois Farmer and Agribusiness
26Loan Guarantee Fund. It shall be the responsibility of the

 

 

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1lender to proceed with the collecting and disposing of
2collateral on the State Guarantee under this Section, Section
3830-45, Section 830-50, or Section 830-55 within 14 months of
4the time the State Guarantee is declared delinquent. If the
5lender does not dispose of the collateral within 14 months, the
6lender shall be liable to repay to the State interest on the
7State Guarantee equal to the same rate that the lender charges
8on the State Guarantee, provided that the Authority shall have
9the authority to extend the 14-month period for a lender in the
10case of bankruptcy or extenuating circumstances. The Fund shall
11be reimbursed for any amounts paid under this Section, Section
12830-30, Section 830-45, Section 830-50, or Section 830-55, or
13Article 835 upon liquidation of the collateral. The Authority,
14by resolution of the Board, may borrow sums from the Fund and
15provide for repayment as soon as may be practical upon receipt
16of payments of principal and interest by a borrower on State
17Guarantee Loans under this Section, Section 830-30, Section
18830-45, Section 830-50, or Section 830-55, or Article 835.
19Money may be borrowed from the Fund by the Authority for the
20sole purpose of paying certain interest costs for borrowers
21associated with selling a loan subject to a State Guarantee
22under this Section, Section 830-30, Section 830-45, Section
23830-50, or Section 830-55, or Article 835 in a secondary market
24as may be deemed reasonable and necessary by the Authority.
25    (d) Notwithstanding the provisions of this Section 830-35
26with respect to the farmers, agribusinesses, and lenders who

 

 

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1may obtain State Guarantees, the Authority may promulgate rules
2establishing the eligibility of farmers, agribusinesses, and
3lenders to participate in the State Guarantee program and the
4terms, standards, and procedures that will apply, when the
5Authority finds that emergency conditions in Illinois
6agriculture have created the need for State Guarantees pursuant
7to terms, standards, and procedures other than those specified
8in this Section.
9(Source: P.A. 96-897, eff. 5-24-10.)
 
10    (20 ILCS 3501/830-45)
11    Sec. 830-45. Young Farmer Loan Guarantee Program.
12    (a) The Authority is authorized to issue State Guarantees
13to lenders for loans to finance or refinance debts of young
14farmers. For the purposes of this Section, a young farmer is a
15resident of Illinois who is at least 18 years of age and who is
16a principal operator of a farm or land, who derives at least
1750% of annual gross income from farming, whose net worth is not
18less than $10,000 and whose debt to asset ratio is not less
19than 40%. For the purposes of this Section, debt to asset ratio
20means current outstanding liabilities, including any debt to be
21financed or refinanced under this Section 830-45, divided by
22current outstanding assets. The Authority shall establish the
23maximum permissible debt to asset ratio based on criteria
24established by the Authority. Lenders shall apply for the State
25Guarantees on forms provided by the Authority and certify that

 

 

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1the application and any other documents submitted are true and
2correct. The lender or borrower, or both in combination, shall
3pay an administrative fee as determined by the Authority. The
4applicant shall be responsible for paying any fee or charge
5involved in recording mortgages, releases, financing
6statements, insurance for secondary market issues, and any
7other similar fee or charge that the Authority may require. The
8application shall at a minimum contain the young farmer's name,
9address, present credit and financial information, including
10cash flow statements, financial statements, balance sheets,
11and any other information pertinent to the application, and the
12collateral to be used to secure the State Guarantee. In
13addition, the borrower must certify to the Authority that, at
14the time the State Guarantee is provided, the borrower will not
15be delinquent in the repayment of any debt. The lender must
16agree to charge a fixed or adjustable interest rate that the
17Authority determines to be below the market rate of interest
18generally available to the borrower. If both the lender and
19applicant agree, the interest rate on the State guaranteed loan
20can be converted to a fixed interest rate at any time during
21the term of the loan. State Guarantees provided under this
22Section (i) shall not exceed $500,000 per young farmer, (ii)
23shall be set up on a payment schedule not to exceed 30 years,
24but shall be no longer than 15 years in duration, and (iii)
25shall be subject to an annual review and renewal by the lender
26and the Authority. A young farmer may use this program more

 

 

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1than once provided the aggregate principal amount of State
2Guarantees under this Section to that young farmer does not
3exceed $500,000. No State Guarantee shall be revoked by the
4Authority without a 90-day notice, in writing, to all parties.
5    (b) The Authority shall provide or renew a State Guarantee
6to a lender if:
7        (i) The lender pays a fee equal to 25 basis points on
8    the loan to the Authority on an annual basis.
9        (ii) The application provides collateral acceptable to
10    the Authority that is at least equal to the State
11    Guarantee.
12        (iii) The lender assumes all responsibility and costs
13    for pursuing legal action on collecting any loan that is
14    delinquent or in default.
15        (iv) The lender is at risk for the first 15% of the
16    outstanding principal of the note for which the State
17    Guarantee is provided.
18    (c) The Illinois Agricultural Loan Guarantee Fund, and the
19Illinois Farmer and Agribusiness Loan Guarantee Fund, and the
20Industrial Project Insurance Fund may be used to secure State
21Guarantees issued under this Section as provided in Section
22830-30, and Section 830-35, and subsection (j) of Section
23805-20, respectively. All payments by the Authority to satisfy
24claims against the State Guarantee shall be made, in whole or
25in part, from any of the following funds in such order and in
26such amounts as the Authority shall determine: (1) the

 

 

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1Industrial Project Insurance Fund (if the Authority exercises
2its discretion under subsection (j) of Section 805-20); (2) the
3Illinois Agricultural Loan Guarantee Fund; or (3) the Illinois
4Farmer and Agribusiness Loan Guarantee Fund.
5    (d) Notwithstanding the provisions of this Section 830-45
6with respect to the young farmers and lenders who may obtain
7State Guarantees, the Authority may promulgate rules
8establishing the eligibility of young farmers and lenders to
9participate in the State Guarantee program and the terms,
10standards, and procedures that will apply, when the Authority
11finds that emergency conditions in Illinois agriculture have
12created the need for State Guarantees pursuant to terms,
13standards, and procedures other than those specified in this
14Section.
15(Source: P.A. 96-897, eff. 5-24-10.)
 
16    (20 ILCS 3501/830-55)
17    Sec. 830-55. Working Capital Loan Guarantee Program.
18    (a) The Authority is authorized to issue State Guarantees
19to lenders for loans to finance needed input costs related to
20and in connection with planting and raising agricultural crops
21and commodities in Illinois. Eligible input costs include, but
22are not limited to, fertilizer, chemicals, feed, seed, fuel,
23parts, and repairs. At the discretion of the Authority, the
24farmer, producer, or agribusiness must be able to provide the
25originating lender with a first lien on the proposed crop or

 

 

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1commodity to be raised and an assignment of Federal Crop
2Insurance sufficient to secure the Working Capital Loan.
3Additional collateral may be required as deemed necessary by
4the lender and the Authority.
5    For the purposes of this Section, an eligible farmer,
6producer, or agribusiness is a resident of Illinois who is at
7least 18 years of age and who is a principal operator of a farm
8or land, who derives at least 50% of annual gross income from
9farming, and whose debt to asset ratio is not less than 40%.
10For the purposes of this Section, debt to asset ratio means
11current outstanding liabilities, including any debt to be
12financed or refinanced under this Section 830-55, divided by
13current outstanding assets. The Authority shall establish the
14maximum permissible debt to asset ratio based on criteria
15established by the Authority. Lenders shall apply for the State
16Guarantees on forms provided by the Authority and certify that
17the application and any other documents submitted are true and
18correct. The lender or borrower, or both in combination, shall
19pay an administrative fee as determined by the Authority. The
20applicant shall be responsible for paying any fee or charge
21involved in recording mortgages, releases, financing
22statements, insurance for secondary market issues, and any
23other similar fee or charge that the Authority may require. The
24application shall at a minimum contain the borrower's name,
25address, present credit and financial information, including
26cash flow statements, financial statements, balance sheets,

 

 

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

 

 

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1    100 basis points on the loan.
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. If the Authority exercises its
17discretion under subsection (j) of Section 805-20 to secure a
18State Guarantee with the Industrial Project Insurance Fund and
19also exercises its discretion under this subsection to secure
20the same State Guarantee with the Illinois Agricultural Loan
21Guarantee Fund, the Illinois Farmer and Agribusiness Loan
22Guarantee Fund, or both, all payments by the Authority to
23satisfy claims against the State Guarantee shall be made from
24the Industrial Project Insurance Fund, the Illinois
25Agricultural Loan Guarantee Fund, or the Illinois Farmer and
26Agribusiness Loan Guarantee Fund, as applicable, in such order

 

 

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1and in such amounts as the Authority shall determine.
2    (d) Notwithstanding the provisions of this Section 830-55
3with respect to the borrowers and lenders who may obtain State
4Guarantees, the Authority may promulgate rules establishing
5the eligibility of borrowers and lenders to participate in the
6State Guarantee program and the terms, standards, and
7procedures that will apply, when the Authority finds that
8emergency conditions in Illinois agriculture have created the
9need for State Guarantees pursuant to terms, standards, and
10procedures other than those specified in this Section.
11(Source: P.A. 96-897, eff. 5-24-10.)
 
12    (20 ILCS 3501/Art. 835 heading new)
13
ARTICLE 835. VETERANS ASSISTANCE

 
14    (20 ILCS 3501/835-5 new)
15    Sec. 835-5. Legislative findings. The General Assembly
16hereby finds and declares the following: (i) that there is an
17inadequate supply of funds available in this State at rates
18sufficiently low to enable veterans to own and operate small
19businesses successfully in this State; (ii) such an inadequate
20supply of funds makes the transition of veterans from service
21in the armed forces of the United States to civilian life more
22difficult and results in increased unemployment of veterans and
23its attendant problems; (iii) that there have been recurrent
24shortages of funds available to small businesses owned and

 

 

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1operated by veterans in this State from private market sources
2at reasonable interest rates; and (iv) that the ordinary
3operations of private enterprise have not in the past corrected
4these conditions.
 
5    (20 ILCS 3501/835-10 new)
6    Sec. 835-10. Definitions. As used or referred to in this
7Article 835, the following words and terms shall have the
8following meanings, except where the context clearly requires
9otherwise:
10    "Fund" means one or more of the Industrial Project
11Insurance Fund, the Illinois Agricultural Loan Guarantee Fund,
12or the Illinois Farmer and Agribusiness Loan Guarantee Fund, as
13applicable.
14    "Illinois Agricultural Loan Guarantee Fund" means the
15Illinois Agricultural Loan Guarantee Fund created under
16Section 830-30(c) of this Act.
17    "Illinois Farmer and Agribusiness Loan Guarantee Fund"
18means the Illinois Farmer and Agribusiness Loan Guarantee Fund
19created under Section 830-35(c) of this Act.
20    "Industrial Project Insurance Fund" means the Industrial
21Project Insurance Fund created under Section 805-15 of this
22Act.
23    "Qualified veteran-owned small business" has the meaning
24provided in subsection (e) of Section 45-57 of the Illinois
25Procurement Code.
 

 

 

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1    (20 ILCS 3501/835-15 new)
2    Sec. 835-15. Powers and duties. The Authority may enter
3into a State Guarantee with a lender, or a person holding a
4note, of a loan or loans to a qualified veteran-owned small
5business and may make payment, in whole or in part, on a State
6Guarantee from any of the following funds in such order and in
7such amounts as the Authority shall determine: (1) the
8Industrial Project Insurance Fund (if the Authority exercises
9its discretion under subsection (j) of Section 805-20); (2) the
10Illinois Agricultural Loan Guarantee Fund; or (3) the Illinois
11Farmer and Agribusiness Loan Guarantee Fund.
 
12    (20 ILCS 3501/835-20 new)
13    Sec. 835-20. State Guarantees for loans to qualified
14veteran-owned small businesses.
15    (a) The Authority is authorized to issue State Guarantees
16to lenders for loans to qualified veteran-owned small business
17for the general corporate purposes of those qualified
18veteran-owned small businesses. Lenders shall apply for the
19State Guarantees on forms provided by the Authority, certify
20that the application and any other documents submitted are true
21and correct, and pay an administrative fee as determined by the
22Authority. The applicant shall be responsible for paying any
23fees or charges involved in recording mortgages, releases, and
24financing statements, and any other similar fees or charges as

 

 

09900SB0324sam001- 26 -LRB099 02938 HLH 48703 a

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

 

 

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1Guarantee on an annual basis after the first 5 years following
2closing of the loan application if the loan contract provides
3for an interest rate that does not vary. A lender shall not
4withdraw a State Guarantee if the loan contract provides for an
5interest rate that may vary, except for reasons set forth in
6this Section.
7    (b) The Authority shall provide or renew a State Guarantee
8to a lender if:
9        (1) a fee equal to 25 basis points on the loan is paid
10    to the Authority on an annual basis by the lender;
11        (2) 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        (3) the lender assumes all responsibility and costs for
15    pursuing legal action on collecting any loan that is
16    delinquent or in default; and
17        (4) 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) If, for any reason, the General Assembly fails to make
21an appropriation sufficient to meet the obligations under a
22State Guarantee, this Act shall constitute an irrevocable and
23continuing appropriation of an amount necessary to secure
24guarantees as defaults occur and the irrevocable and continuing
25authority for, and direction to, the State Treasurer and the
26Comptroller to make the necessary transfers to the Industrial

 

 

09900SB0324sam001- 28 -LRB099 02938 HLH 48703 a

1Project Insurance Fund, the Illinois Agricultural Loan
2Guarantee Fund, or the Illinois Farmer and Agribusiness Loan
3Guarantee Fund, or any combination of those funds, as directed
4by the Governor, out of the General Revenue Fund. In the event
5of a default by the borrower on a loan subject to a State
6Guarantee under this Section, Section 830-30, Section 830-35,
7Section 830-45, Section 830-50, or Section 830–55, the lender
8shall be entitled to, and the Authority shall direct payment
9on, the State Guarantee after 90 days of delinquency. Payments
10by the Authority to satisfy claims against the State Guarantee
11shall be made, in whole or in part, from any of the following
12funds in such order and in such amounts as the Authority shall
13determine: (1) the Industrial Project Insurance Fund created
14under Article 805 of this Act (if the Authority exercises its
15discretion under subsection (j) of Section 805-20); (2) the
16Illinois Farmer and Agribusiness Loan Guarantee Fund; or (3)
17the Illinois Agricultural Loan Guarantee Fund. It shall be the
18responsibility of the lender to proceed with collecting and
19disposing of collateral on the State Guarantee under this
20Section within 14 months after the State Guarantee is declared
21delinquent. If the lender does not dispose of the collateral
22within that 14-month period, the lender shall be liable to
23repay to the State interest on the State Guarantee at a rate
24equal to the same rate that the lender charges on the State
25Guarantee, provided that the Authority shall have the authority
26to extend the 14-month period for a lender in the case of

 

 

09900SB0324sam001- 29 -LRB099 02938 HLH 48703 a

1bankruptcy or extenuating circumstances. The applicable fund
2or funds shall be reimbursed for any amounts paid under this
3Section, Section 830-30, Section 830-35, Section 830-45,
4Section 830-50, or Section 830-55 upon liquidation of the
5collateral. The Authority, by resolution of the Board, may
6borrow sums from a fund or funds and provide for repayment as
7soon as may be practical upon receipt of payments of principal
8and interest by a borrower on loans subject to a State
9Guarantee under this Section, Section 830-30, Section 830-35,
10Section 830-45, Section 830-50, or Section 830-55. Money may be
11borrowed from the Fund by the Authority for the sole purpose of
12paying certain interest costs for borrowers associated with
13selling a loan subject to a State Guarantee under this Section,
14Section 830–30, Section 830–35, Section 830-45, Section
15830-50, or Section 830-55 in a secondary market as may be
16deemed reasonable and necessary by the Authority.
17    (d) Notwithstanding the provisions of this Section with
18respect to the qualified veteran-owned small businesses and
19lenders who may obtain State Guarantees, the Authority may
20adopt rules establishing the eligibility of qualified
21veteran-owned small businesses and lenders to participate in
22the State Guarantee program and the terms, standards, and
23procedures that will apply, if the Authority finds that
24emergency conditions in Illinois have created the need for
25State Guarantees pursuant to terms, standards, and procedures
26other than those specified in this Section.
 

 

 

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1    (20 ILCS 3501/835-25 new)
2    Sec. 835-25. Authority administrative expenses. The
3Authority is authorized to reimburse itself for the ordinary
4and necessary expenses of administering the State Guarantee
5programs under this Article and Article 830 from amounts from
6time to time available in the Industrial Project Insurance
7Fund, the Illinois Farmer and Agribusiness Loan Guarantee Fund,
8or the Illinois Agricultural Loan Guarantee Fund, in whole or
9in part, in such order and in such amounts as the Authority
10shall determine. Ordinary and necessary expenses of
11administering those State Guarantee programs include, without
12limitation, costs of general administration, staff, accounting
13and auditing services, legal services, judgments, loan
14servicing, realization upon collateral, communications with
15borrowers and lenders, and similar expenses, all to the extent
16reasonably allocable to such State Guarantee programs.
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.".