Public Act 099-0509
 
SB0324 EnrolledLRB099 02938 JLK 22946 b

    AN ACT concerning government.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Finance Authority Act is amended by
changing Sections 805-20, 830-30, 830-35, 830-45, and 830-55
and by adding Article 835 as follows:
 
    (20 ILCS 3501/805-20)
    Sec. 805-20. Powers and Duties; Industrial Project
Insurance Program. The Authority has the power:
    (a) to insure and make advance commitments to insure all or
any part of the payments required on the bonds issued or a loan
made to finance any environmental facility under the Illinois
Environmental Facilities Financing Act or for any industrial
project upon such terms and conditions as the Authority may
prescribe in accordance with this Article. The insurance
provided by the Authority shall be payable solely from the Fund
created by Section 805-15 and shall not constitute a debt or
pledge of the full faith and credit of the State, the
Authority, or any political subdivision thereof;
    (b) to enter into insurance contracts, letters of credit or
any other agreements or contracts with financial institutions
with respect to the Fund and any bonds or loans insured
thereunder. Any such agreement or contract may contain terms
and provisions necessary or desirable in connection with the
program, subject to the requirements established by this Act,
including without limitation terms and provisions relating to
loan documentation, review and approval procedures,
origination and servicing rights and responsibilities, default
conditions, procedures and obligations with respect to
insurance contracts made under this Act. The agreements or
contracts may be executed on an individual, group or master
contract basis with financial institutions;
    (c) to charge reasonable fees to defray the cost of
obtaining letters of credit or other similar documents, other
than insurance contracts under paragraph (b). Any such fees
shall be payable by such person, in such amounts and at such
times as the Authority shall determine, and the amount of the
fees need not be uniform among the various bonds or loans
insured;
    (d) to fix insurance premiums for the insurance of payments
under the provisions of this Article. Such premiums shall be
computed as determined by the Authority. Any premiums for the
insurance of loan payments under the provisions of this Act
shall be payable by such person, in such amounts and at such
times as the Authority shall determine, and the amount of the
premiums need not be uniform among the various bonds or loans
insured;
    (e) to establish application fees and prescribe
application, notification, contract and insurance forms, rules
and regulations it deems necessary or appropriate;
    (f) to make loans and to issue bonds secured by insurance
or other agreements authorized by paragraphs (a) and (b) of
this Section 805-20 and to issue bonds secured by loans that
are guaranteed by the federal government or agencies thereof;
    (g) to issue a single bond issue, or a series of bond
issues, for a group of industrial projects, a group of
corporations, or a group of business entities or any
combination thereof insured by insurance or backed by any other
agreement authorized by paragraphs (a) and (b) of this Section
or secured by loans that are guaranteed by the federal
government or agencies thereof;
    (h) to enter into trust agreements for the management of
the Fund created under Section 805-15 of this Act;
    (i) to exercise such other powers as are necessary or
incidental to the powers granted in this Section and to the
issuance of State Guarantees under Article 830 of this Act; and
    (j) at the discretion of the Authority, to insure and make
advance commitments to insure, and issue State Guarantees for,
all or any part of the payments required on the bonds issued or
loans made to finance any agricultural facility, project,
farmer, producer, agribusiness, qualified veteran-owned small
business, or program under Article 830 or Article 835 of this
Act upon such terms and conditions as the Authority may
prescribe in accordance with this Article. The insurance and
State Guarantees provided by the Authority may be payable from
the Fund created by Section 805-15 and is in addition to and
not in replacement of the Illinois Agricultural Loan Guarantee
Fund and the Illinois Farmer and Agribusiness Loan Guarantee
Fund created under Article 830 of this Act.
(Source: P.A. 96-897, eff. 5-24-10; 97-333, eff. 8-12-11.)
 
    (20 ILCS 3501/830-30)
    Sec. 830-30. State Guarantees for existing debt.
    (a) The Authority is authorized to issue State Guarantees
for farmers' existing debts held by a lender. For the purposes
of this Section, a farmer shall be a resident of Illinois, who
is a principal operator of a farm or land, at least 50% of
whose annual gross income is derived from farming and whose
debt to asset ratio shall not be less than 40%, except in those
cases where the applicant has previously used the guarantee
program there shall be no debt to asset ratio or income
restriction. For the purposes of this Section, debt to asset
ratio shall mean the current outstanding liabilities of the
farmer divided by the current outstanding assets of the farmer.
The Authority shall establish the maximum permissible debt to
asset ratio based on criteria established by the Authority.
Lenders shall apply for the State Guarantees on forms provided
by the Authority and certify that the application and any other
documents submitted are true and correct. The lender or
borrower, or both in combination, shall pay an administrative
fee as determined by the Authority. The applicant shall be
responsible for paying any fees or charges involved in
recording mortgages, releases, financing statements, insurance
for secondary market issues and any other similar fees or
charges as the Authority may require. The application shall at
a minimum contain the farmer's name, address, present credit
and financial information, including cash flow statements,
financial statements, balance sheets, and any other
information pertinent to the application, and the collateral to
be used to secure the State Guarantee. In addition, the lender
must agree to bring the farmer's debt to a current status at
the time the State Guarantee is provided and must also agree to
charge a fixed or adjustable interest rate which the Authority
determines to be below the market rate of interest generally
available to the borrower. If both the lender and applicant
agree, the interest rate on the State Guarantee Loan can be
converted to a fixed interest rate at any time during the term
of the loan. Any State Guarantees provided under this Section
(i) shall not exceed $500,000 per farmer, (ii) shall be set up
on a payment schedule not to exceed 30 years, and shall be no
longer than 30 years in duration, and (iii) shall be subject to
an annual review and renewal by the lender and the Authority;
provided that only one such State Guarantee shall be
outstanding per farmer at any one time. No State Guarantee
shall be revoked by the Authority without a 90-day notice, in
writing, to all parties. In those cases where the borrower has
not previously used the guarantee program, the lender shall not
call due any loan during the first 3 years for any reason
except for lack of performance or insufficient collateral. The
lender can review and withdraw or continue with the State
Guarantee on an annual basis after the first 3 years of the
loan, provided a 90-day notice, in writing, to all parties has
been given.
    (b) The Authority shall provide or renew a State Guarantee
to a lender if:
        (i) A fee equal to 25 basis points on the loan is paid
    to the Authority on an annual basis by the lender.
        (ii) The application provides collateral acceptable to
    the Authority that is at least equal to the State's portion
    of the Guarantee to be provided.
        (iii) The lender assumes all responsibility and costs
    for pursuing legal action on collecting any loan that is
    delinquent or in default.
        (iv) The lender is responsible for the first 15% of the
    outstanding principal of the note for which the State
    Guarantee has been applied.
    (c) There is hereby created outside of the State treasury a
special fund to be known as the Illinois Agricultural Loan
Guarantee Fund. The State Treasurer shall be custodian of this
Fund. Any amounts in the Illinois Agricultural Loan Guarantee
Fund not currently needed to meet the obligations of the Fund
shall be invested as provided by law, and all interest earned
from these investments shall be deposited into the Fund until
the Fund reaches the maximum amount authorized in this Act;
thereafter, interest earned shall be deposited into the General
Revenue Fund. After September 1, 1989, annual investment
earnings equal to 1.5% of the Fund shall remain in the Fund to
be used for the purposes established in Section 830-40 of this
Act. The Authority is authorized to transfer to the Fund such
amounts as are necessary to satisfy claims during the duration
of the State Guarantee program to secure State Guarantees
issued under this Section, provided that amounts to be paid
from the Industrial Project Insurance Fund created under
Article 805 of this Act may be paid by the Authority directly
to satisfy claims and need not be deposited first into the
Illinois Agricultural Loan Guarantee Fund. If for any reason
the General Assembly fails to make an appropriation sufficient
to meet these obligations, this Act shall constitute an
irrevocable and continuing appropriation of an amount
necessary to secure guarantees as defaults occur and the
irrevocable and continuing authority for, and direction to, the
State Treasurer and the Comptroller to make the necessary
transfers to the Illinois Agricultural Loan Guarantee Fund, as
directed by the Governor, out of the General Revenue Fund.
Within 30 days after November 15, 1985, the Authority may
transfer up to $7,000,000 from available appropriations into
the Illinois Agricultural Loan Guarantee Fund for the purposes
of this Act. Thereafter, the Authority may transfer additional
amounts into the Illinois Agricultural Loan Guarantee Fund to
secure guarantees for defaults as defaults occur. In the event
of default by the farmer, the lender shall be entitled to, and
the Authority shall direct payment on, the State Guarantee
after 90 days of delinquency. All payments by the Authority
shall be made from the Illinois Agricultural Loan Guarantee
Fund to satisfy claims against the State Guarantee shall be
made, in whole or in part, from any of the following funds in
such order and in such amounts as the Authority shall
determine: (1) the Industrial Project Insurance Fund created
under Article 805 of this Act (if the Authority exercises its
discretion under subsection (j) of Section 805-20); (2) the
Illinois Agricultural Loan Guarantee Fund; or (3) the Illinois
Farmer and Agribusiness Loan Guarantee Fund. The Illinois
Agricultural Loan Guarantee Fund shall guarantee receipt of
payment of the 85% of the principal and interest owed on the
State Guarantee Loan by the farmer to the guarantee holder,
provided that payments by the Authority to satisfy claims
against the State Guarantee shall be made in accordance with
the preceding sentence. It shall be the responsibility of the
lender to proceed with the collecting and disposing of
collateral on the State Guarantee under this Section, Section
830-35, Section 830-45, Section 830-50, Section 830-55, or
Article 835 within 14 months of the time the State Guarantee is
declared delinquent; provided, however, that the lender shall
not collect or dispose of collateral on the State Guarantee
without the express written prior approval of the Authority. If
the lender does not dispose of the collateral within 14 months,
the lender shall be liable to repay to the State interest on
the State Guarantee equal to the same rate which the lender
charges on the State Guarantee; provided, however, that the
Authority may extend the 14-month period for a lender in the
case of bankruptcy or extenuating circumstances. The Fund from
which a payment is made shall be reimbursed for any amounts
paid from that Fund under this Section, Section 830-35, Section
830-45, Section 830-50, Section 830-55, or Article 835 upon
liquidation of the collateral. The Authority, by resolution of
the Board, may borrow sums from the Fund and provide for
repayment as soon as may be practical upon receipt of payments
of principal and interest by a farmer. Money may be borrowed
from the Fund by the Authority for the sole purpose of paying
certain interest costs for farmers associated with selling a
loan subject to a State Guarantee in a secondary market as may
be deemed reasonable and necessary by the Authority.
    (d) Notwithstanding the provisions of this Section 830-30
with respect to the farmers and lenders who may obtain State
Guarantees, the Authority may promulgate rules establishing
the eligibility of farmers and lenders to participate in the
State guarantee program and the terms, standards, and
procedures that will apply, when the Authority finds that
emergency conditions in Illinois agriculture have created the
need for State Guarantees pursuant to terms, standards, and
procedures other than those specified in this Section.
(Source: P.A. 93-205, eff. 1-1-04.)
 
    (20 ILCS 3501/830-35)
    Sec. 830-35. State Guarantees for loans to farmers and
agribusiness; eligibility.
    (a) The Authority is authorized to issue State Guarantees
to lenders for loans to eligible farmers and agribusinesses for
purposes set forth in this Section. For purposes of this
Section, an eligible farmer shall be a resident of Illinois (i)
who is principal operator of a farm or land, at least 50% of
whose annual gross income is derived from farming, (ii) whose
annual total sales of agricultural products, commodities, or
livestock exceeds $20,000, and (iii) whose net worth does not
exceed $500,000. An eligible agribusiness shall be that as
defined in Section 801-10 of this Act. The Authority may
approve applications by farmers and agribusinesses that
promote diversification of the farm economy of this State
through the growth and development of new crops or livestock
not customarily grown or produced in this State or that
emphasize a vertical integration of grain or livestock produced
or raised in this State into a finished agricultural product
for consumption or use. "New crops or livestock not customarily
grown or produced in this State" shall not include corn,
soybeans, wheat, swine, or beef or dairy cattle. "Vertical
integration of grain or livestock produced or raised in this
State" shall include any new or existing grain or livestock
grown or produced in this State. Lenders shall apply for the
State Guarantees on forms provided by the Authority, certify
that the application and any other documents submitted are true
and correct, and pay an administrative fee as determined by the
Authority. The applicant shall be responsible for paying any
fees or charges involved in recording mortgages, releases,
financing statements, insurance for secondary market issues
and any other similar fees or charges as the Authority may
require. The application shall at a minimum contain the
farmer's or agribusiness' name, address, present credit and
financial information, including cash flow statements,
financial statements, balance sheets, and any other
information pertinent to the application, and the collateral to
be used to secure the State Guarantee. In addition, the lender
must agree to charge an interest rate, which may vary, on the
loan that the Authority determines to be below the market rate
of interest generally available to the borrower. If both the
lender and applicant agree, the interest rate on the State
Guarantee Loan can be converted to a fixed interest rate at any
time during the term of the loan. Any State Guarantees provided
under this Section (i) shall not exceed $500,000 per farmer or
an amount as determined by the Authority on a case-by-case
basis for an agribusiness, (ii) shall not exceed a term of 15
years, and (iii) shall be subject to an annual review and
renewal by the lender and the Authority; provided that only one
such State Guarantee shall be made per farmer or agribusiness,
except that additional State Guarantees may be made for
purposes of expansion of projects financed in part by a
previously issued State Guarantee. No State Guarantee shall be
revoked by the Authority without a 90-day notice, in writing,
to all parties. The lender shall not call due any loan for any
reason except for lack of performance, insufficient
collateral, or maturity. A lender may review and withdraw or
continue with a State Guarantee on an annual basis after the
first 5 years following closing of the loan application if the
loan contract provides for an interest rate that shall not
vary. A lender shall not withdraw a State Guarantee if the loan
contract provides for an interest rate that may vary, except
for reasons set forth herein.
    (b) The Authority shall provide or renew a State Guarantee
to a lender if:
        (i) A fee equal to 25 basis points on the loan is paid
    to the Authority on an annual basis by the lender.
        (ii) The application provides collateral acceptable to
    the Authority that is at least equal to the State's portion
    of the Guarantee to be provided.
        (iii) The lender assumes all responsibility and costs
    for pursuing legal action on collecting any loan that is
    delinquent or in default.
        (iv) The lender is responsible for the first 15% of the
    outstanding principal of the note for which the State
    Guarantee has been applied.
    (c) There is hereby created outside of the State treasury a
special fund to be known as the Illinois Farmer and
Agribusiness Loan Guarantee Fund. The State Treasurer shall be
custodian of this Fund. Any amounts in the Fund not currently
needed to meet the obligations of the Fund shall be invested as
provided by law, and all interest earned from these investments
shall be deposited into the Fund until the Fund reaches the
maximum amounts authorized in this Act; thereafter, interest
earned shall be deposited into the General Revenue Fund. After
September 1, 1989, annual investment earnings equal to 1.5% of
the Fund shall remain in the Fund to be used for the purposes
established in Section 830-40 of this Act. The Authority is
authorized to transfer such amounts as are necessary to satisfy
claims from available appropriations and from fund balances of
the Farm Emergency Assistance Fund as of June 30 of each year
to the Illinois Farmer and Agribusiness Loan Guarantee Fund to
secure State Guarantees issued under this Section, and Sections
830-30, 830-45, 830-50, and 830-55, and Article 835 of this
Act. Amounts to be paid from the Industrial Project Insurance
Fund created under Article 805 of this Act may be paid by the
Authority directly to satisfy claims and need not be deposited
first into the Illinois Farmer and Agribusiness Loan Guarantee
Fund. If for any reason the General Assembly fails to make an
appropriation sufficient to meet these obligations, this Act
shall constitute an irrevocable and continuing appropriation
of an amount necessary to secure guarantees as defaults occur
and the irrevocable and continuing authority for, and direction
to, the State Treasurer and the Comptroller to make the
necessary transfers to the Illinois Farmer and Agribusiness
Loan Guarantee Fund, as directed by the Governor, out of the
General Revenue Fund. In the event of default by the borrower
on State Guarantee Loans under this Section, Section 830-45,
Section 830-50, or Section 830-55, the lender shall be entitled
to, and the Authority shall direct payment on, the State
Guarantee after 90 days of delinquency. All payments by the
Authority shall be made from the Illinois Farmer and
Agribusiness Loan Guarantee Fund to satisfy claims against the
State Guarantee shall be made, in whole or in part, from any of
the following funds in such order and in such amounts as the
Authority shall determine: (1) the Industrial Project
Insurance Fund created under Article 805 of this Act (if the
Authority exercises its discretion under subsection (j) of
Section 805-20); (2) the Illinois Farmer and Agribusiness Loan
Guarantee Fund; or (3) the Illinois Farmer and Agribusiness
Loan Guarantee Fund. It shall be the responsibility of the
lender to proceed with the collecting and disposing of
collateral on the State Guarantee under this Section, Section
830-45, Section 830-50, or Section 830-55 within 14 months of
the time the State Guarantee is declared delinquent. If the
lender does not dispose of the collateral within 14 months, the
lender shall be liable to repay to the State interest on the
State Guarantee equal to the same rate that the lender charges
on the State Guarantee, provided that the Authority shall have
the authority to extend the 14-month period for a lender in the
case of bankruptcy or extenuating circumstances. The Fund shall
be reimbursed for any amounts paid under this Section, Section
830-30, Section 830-45, Section 830-50, or Section 830-55, or
Article 835 upon liquidation of the collateral. The Authority,
by resolution of the Board, may borrow sums from the Fund and
provide for repayment as soon as may be practical upon receipt
of payments of principal and interest by a borrower on State
Guarantee Loans under this Section, Section 830-30, Section
830-45, Section 830-50, or Section 830-55, or Article 835.
Money may be borrowed from the Fund by the Authority for the
sole purpose of paying certain interest costs for borrowers
associated with selling a loan subject to a State Guarantee
under this Section, Section 830-30, Section 830-45, Section
830-50, or Section 830-55, or Article 835 in a secondary market
as may be deemed reasonable and necessary by the Authority.
    (d) Notwithstanding the provisions of this Section 830-35
with respect to the farmers, agribusinesses, and lenders who
may obtain State Guarantees, the Authority may promulgate rules
establishing the eligibility of farmers, agribusinesses, and
lenders to participate in the State Guarantee program and the
terms, standards, and procedures that will apply, when the
Authority finds that emergency conditions in Illinois
agriculture have created the need for State Guarantees pursuant
to terms, standards, and procedures other than those specified
in this Section.
(Source: P.A. 96-897, eff. 5-24-10.)
 
    (20 ILCS 3501/830-45)
    Sec. 830-45. Young Farmer Loan Guarantee Program.
    (a) The Authority is authorized to issue State Guarantees
to lenders for loans to finance or refinance debts of young
farmers. For the purposes of this Section, a young farmer is a
resident of Illinois who is at least 18 years of age and who is
a principal operator of a farm or land, who derives at least
50% of annual gross income from farming, whose net worth is not
less than $10,000 and whose debt to asset ratio is not less
than 40%. For the purposes of this Section, debt to asset ratio
means current outstanding liabilities, including any debt to be
financed or refinanced under this Section 830-45, divided by
current outstanding assets. The Authority shall establish the
maximum permissible debt to asset ratio based on criteria
established by the Authority. Lenders shall apply for the State
Guarantees on forms provided by the Authority and certify that
the application and any other documents submitted are true and
correct. The lender or borrower, or both in combination, shall
pay an administrative fee as determined by the Authority. The
applicant shall be responsible for paying any fee or charge
involved in recording mortgages, releases, financing
statements, insurance for secondary market issues, and any
other similar fee or charge that the Authority may require. The
application shall at a minimum contain the young farmer's name,
address, present credit and financial information, including
cash flow statements, financial statements, balance sheets,
and any other information pertinent to the application, and the
collateral to be used to secure the State Guarantee. In
addition, the borrower must certify to the Authority that, at
the time the State Guarantee is provided, the borrower will not
be delinquent in the repayment of any debt. The lender must
agree to charge a fixed or adjustable interest rate that the
Authority determines to be below the market rate of interest
generally available to the borrower. If both the lender and
applicant agree, the interest rate on the State guaranteed loan
can be converted to a fixed interest rate at any time during
the term of the loan. State Guarantees provided under this
Section (i) shall not exceed $500,000 per young farmer, (ii)
shall be set up on a payment schedule not to exceed 30 years,
but shall be no longer than 15 years in duration, and (iii)
shall be subject to an annual review and renewal by the lender
and the Authority. A young farmer may use this program more
than once provided the aggregate principal amount of State
Guarantees under this Section to that young farmer does not
exceed $500,000. No State Guarantee shall be revoked by the
Authority without a 90-day notice, in writing, to all parties.
    (b) The Authority shall provide or renew a State Guarantee
to a lender if:
        (i) The lender pays a fee equal to 25 basis points on
    the loan to the Authority on an annual basis.
        (ii) The application provides collateral acceptable to
    the Authority that is at least equal to the State
    Guarantee.
        (iii) The lender assumes all responsibility and costs
    for pursuing legal action on collecting any loan that is
    delinquent or in default.
        (iv) The lender is at risk for the first 15% of the
    outstanding principal of the note for which the State
    Guarantee is provided.
    (c) The Illinois Agricultural Loan Guarantee Fund, and the
Illinois Farmer and Agribusiness Loan Guarantee Fund, and the
Industrial Project Insurance Fund may be used to secure State
Guarantees issued under this Section as provided in Section
830-30, and Section 830-35, and subsection (j) of Section
805-20, respectively. All payments by the Authority to satisfy
claims against the State Guarantee shall be made, in whole or
in part, from any of the following funds in such order and in
such amounts as the Authority shall determine: (1) the
Industrial Project Insurance Fund (if the Authority exercises
its discretion under subsection (j) of Section 805-20); (2) the
Illinois Agricultural Loan Guarantee Fund; or (3) the Illinois
Farmer and Agribusiness Loan Guarantee Fund.
    (d) Notwithstanding the provisions of this Section 830-45
with respect to the young farmers and lenders who may obtain
State Guarantees, the Authority may promulgate rules
establishing the eligibility of young farmers and lenders to
participate in the State Guarantee program and the terms,
standards, and procedures that will apply, when the Authority
finds that emergency conditions in Illinois agriculture have
created the need for State Guarantees pursuant to terms,
standards, and procedures other than those specified in this
Section.
(Source: P.A. 96-897, eff. 5-24-10.)
 
    (20 ILCS 3501/830-55)
    Sec. 830-55. Working Capital Loan Guarantee Program.
    (a) The Authority is authorized to issue State Guarantees
to lenders for loans to finance needed input costs related to
and in connection with planting and raising agricultural crops
and commodities in Illinois. Eligible input costs include, but
are not limited to, fertilizer, chemicals, feed, seed, fuel,
parts, and repairs. At the discretion of the Authority, the
farmer, producer, or agribusiness must be able to provide the
originating lender with a first lien on the proposed crop or
commodity to be raised and an assignment of Federal Crop
Insurance sufficient to secure the Working Capital Loan.
Additional collateral may be required as deemed necessary by
the lender and the Authority.
    For the purposes of this Section, an eligible farmer,
producer, or agribusiness is a resident of Illinois who is at
least 18 years of age and who is a principal operator of a farm
or land, who derives at least 50% of annual gross income from
farming, and whose debt to asset ratio is not less than 40%.
For the purposes of this Section, debt to asset ratio means
current outstanding liabilities, including any debt to be
financed or refinanced under this Section 830-55, divided by
current outstanding assets. The Authority shall establish the
maximum permissible debt to asset ratio based on criteria
established by the Authority. Lenders shall apply for the State
Guarantees on forms provided by the Authority and certify that
the application and any other documents submitted are true and
correct. The lender or borrower, or both in combination, shall
pay an administrative fee as determined by the Authority. The
applicant shall be responsible for paying any fee or charge
involved in recording mortgages, releases, financing
statements, insurance for secondary market issues, and any
other similar fee or charge that the Authority may require. The
application shall at a minimum contain the borrower's name,
address, present credit and financial information, including
cash flow statements, financial statements, balance sheets,
and any other information pertinent to the application, and the
collateral to be used to secure the State Guarantee. In
addition, the borrower must certify to the Authority that, at
the time the State Guarantee is provided, the borrower will not
be delinquent in the repayment of any debt. The lender must
agree to charge a fixed or adjustable interest rate that the
Authority determines to be below the market rate of interest
generally available to the borrower. If both the lender and
applicant agree, the interest rate on the State guaranteed loan
can be converted to a fixed interest rate at any time during
the term of the loan. State Guarantees provided under this
Section (i) shall not exceed $250,000 per borrower, (ii) shall
be repaid annually, and (iii) shall be subject to an annual
review and renewal by the lender and the Authority. The State
Guarantee may be renewed annually, for a period not to exceed 3
total years per State Guarantee, if the borrower meets
financial criteria and other conditions, as established by the
Authority. A farmer or agribusiness may use this program more
than once provided the aggregate principal amount of State
Guarantees under this Section to that farmer or agribusiness
does not exceed $250,000 annually. No State Guarantee shall be
revoked by the Authority without a 90-day notice, in writing,
to all parties.
    (b) The Authority shall provide a State Guarantee to a
lender if:
        (i) The borrower pays to the Authority a fee equal to
    100 basis points on the loan.
        (ii) The application provides collateral acceptable to
    the Authority that is at least equal to the State
    Guarantee.
        (iii) The lender assumes all responsibility and costs
    for pursuing legal action on collecting any loan that is
    delinquent or in default.
        (iv) The lender is at risk for the first 15% of the
    outstanding principal of the note for which the State
    Guarantee is provided.
    (c) The Illinois Agricultural Loan Guarantee Fund, and the
Illinois Farmer and Agribusiness Loan Guarantee Fund, and the
Industrial Project Insurance Fund may be used to secure State
Guarantees issued under this Section as provided in Section
830-30, and Section 830-35, and subsection (j) of Section
805-20, respectively. If the Authority exercises its
discretion under subsection (j) of Section 805-20 to secure a
State Guarantee with the Industrial Project Insurance Fund and
also exercises its discretion under this subsection to secure
the same State Guarantee with the Illinois Agricultural Loan
Guarantee Fund, the Illinois Farmer and Agribusiness Loan
Guarantee Fund, or both, all payments by the Authority to
satisfy claims against the State Guarantee shall be made from
the Industrial Project Insurance Fund, the Illinois
Agricultural Loan Guarantee Fund, or the Illinois Farmer and
Agribusiness Loan Guarantee Fund, as applicable, in such order
and in such amounts as the Authority shall determine.
    (d) Notwithstanding the provisions of this Section 830-55
with respect to the borrowers and lenders who may obtain State
Guarantees, the Authority may promulgate rules establishing
the eligibility of borrowers and lenders to participate in the
State Guarantee program and the terms, standards, and
procedures that will apply, when the Authority finds that
emergency conditions in Illinois agriculture have created the
need for State Guarantees pursuant to terms, standards, and
procedures other than those specified in this Section.
(Source: P.A. 96-897, eff. 5-24-10.)
 
    (20 ILCS 3501/Art. 835 heading new)
ARTICLE 835. VETERANS ASSISTANCE

 
    (20 ILCS 3501/835-5 new)
    Sec. 835-5. Legislative findings. The General Assembly
hereby finds and declares the following: (i) that there is an
inadequate supply of funds available in this State at rates
sufficiently low to enable veterans to own and operate small
businesses successfully in this State; (ii) such an inadequate
supply of funds makes the transition of veterans from service
in the armed forces of the United States to civilian life more
difficult and results in increased unemployment of veterans and
its attendant problems; (iii) that there have been recurrent
shortages of funds available to small businesses owned and
operated by veterans in this State from private market sources
at reasonable interest rates; and (iv) that the ordinary
operations of private enterprise have not in the past corrected
these conditions.
 
    (20 ILCS 3501/835-10 new)
    Sec. 835-10. Definitions. As used or referred to in this
Article 835, the following words and terms shall have the
following meanings, except where the context clearly requires
otherwise:
    "Fund" means one or more of the Industrial Project
Insurance Fund, the Illinois Agricultural Loan Guarantee Fund,
or the Illinois Farmer and Agribusiness Loan Guarantee Fund, as
applicable.
    "Illinois Agricultural Loan Guarantee Fund" means the
Illinois Agricultural Loan Guarantee Fund created under
Section 830-30(c) of this Act.
    "Illinois Farmer and Agribusiness Loan Guarantee Fund"
means the Illinois Farmer and Agribusiness Loan Guarantee Fund
created under Section 830-35(c) of this Act.
    "Industrial Project Insurance Fund" means the Industrial
Project Insurance Fund created under Section 805-15 of this
Act.
    "Qualified veteran-owned small business" has the meaning
provided in subsection (e) of Section 45-57 of the Illinois
Procurement Code.
 
    (20 ILCS 3501/835-15 new)
    Sec. 835-15. Powers and duties. The Authority may enter
into a State Guarantee with a lender, or a person holding a
note, of a loan or loans to a qualified veteran-owned small
business and may make payment, in whole or in part, on a State
Guarantee from any of the following funds in such order and in
such amounts as the Authority shall determine: (1) the
Industrial Project Insurance Fund (if the Authority exercises
its discretion under subsection (j) of Section 805-20); (2) the
Illinois Agricultural Loan Guarantee Fund; or (3) the Illinois
Farmer and Agribusiness Loan Guarantee Fund.
 
    (20 ILCS 3501/835-20 new)
    Sec. 835-20. State Guarantees for loans to qualified
veteran-owned small businesses.
    (a) The Authority is authorized to issue State Guarantees
to lenders for loans to qualified veteran-owned small
businesses for the general corporate purposes of those
qualified veteran-owned small businesses. Lenders shall apply
for the State Guarantees on forms provided by the Authority,
certify that the application and any other documents submitted
are true and correct, and pay an administrative fee as
determined by the Authority. The applicant shall be responsible
for paying any fees or charges involved in recording mortgages,
releases, and financing statements, and any other similar fees
or charges as the Authority may require. The application shall,
at a minimum, contain the name, address, present credit and
financial information, including cash flow statements,
financial statements, and balance sheets, of the qualified
veteran-owned small business, any other information pertinent
to the application, and the collateral to be used to secure the
State Guarantee.
    In addition, the lender must agree to charge an interest
rate, which may vary, on the loan that the Authority determines
to be below the market rate of interest generally available to
the borrower. If both the lender and applicant agree, the
interest rate on the loan subject to a State Guarantee can be
converted to a fixed interest rate at any time during the term
of the loan. Any State Guarantees provided under this Section
shall (i) not exceed $500,000 per qualified veteran-owned small
business, (ii) not exceed a term of 15 years, and (iii) be
subject to an annual review and renewal by the lender and the
Authority; provided that only one such State Guarantee shall be
made per qualified veteran-owned small business, except that
additional State Guarantees may be made for purposes of
expansion of projects financed in part by a previously issued
State Guarantee. No State Guarantee shall be revoked by the
Authority without a 90-day notice, in writing, to all parties.
The lender shall not call due any loan for any reason except
for lack of performance, insufficient collateral, or maturity.
A lender may review and withdraw or continue with a State
Guarantee on an annual basis after the first 5 years following
closing of the loan application if the loan contract provides
for an interest rate that does not vary. A lender shall not
withdraw a State Guarantee if the loan contract provides for an
interest rate that may vary, except for reasons set forth in
this Section.
    (b) The Authority shall provide or renew a State Guarantee
to a lender if:
        (1) a fee equal to 25 basis points on the loan is paid
    to the Authority on an annual basis by the lender;
        (2) the application provides collateral acceptable to
    the Authority that is at least equal to the State's portion
    of the Guarantee to be provided;
        (3) the lender assumes all responsibility and costs for
    pursuing legal action on collecting any loan that is
    delinquent or in default; and
        (4) the lender is responsible for the first 15% of the
    outstanding principal of the note for which the State
    Guarantee has been applied.
    (c) If, for any reason, the General Assembly fails to make
an appropriation sufficient to meet the obligations under a
State Guarantee, this Act shall constitute an irrevocable and
continuing appropriation of an amount necessary to secure
guarantees as defaults occur and the irrevocable and continuing
authority for, and direction to, the State Treasurer and the
Comptroller to make the necessary transfers to the Industrial
Project Insurance Fund, the Illinois Agricultural Loan
Guarantee Fund, or the Illinois Farmer and Agribusiness Loan
Guarantee Fund, or any combination of those funds, as directed
by the Governor, out of the General Revenue Fund. In the event
of a default by the borrower on a loan subject to a State
Guarantee under this Section, Section 830-30, Section 830-35,
Section 830-45, Section 830-50, or Section 83055, the lender
shall be entitled to, and the Authority shall direct payment
on, the State Guarantee after 90 days of delinquency. Payments
by the Authority to satisfy claims against the State Guarantee
shall be made, in whole or in part, from any of the following
funds in such order and in such amounts as the Authority shall
determine: (1) the Industrial Project Insurance Fund created
under Article 805 of this Act (if the Authority exercises its
discretion under subsection (j) of Section 805-20); (2) the
Illinois Farmer and Agribusiness Loan Guarantee Fund; or (3)
the Illinois Agricultural Loan Guarantee Fund. It shall be the
responsibility of the lender to proceed with collecting and
disposing of collateral on the State Guarantee under this
Section within 14 months after the State Guarantee is declared
delinquent. If the lender does not dispose of the collateral
within that 14-month period, the lender shall be liable to
repay to the State interest on the State Guarantee at a rate
equal to the same rate that the lender charges on the State
Guarantee, provided that the Authority shall have the authority
to extend the 14-month period for a lender in the case of
bankruptcy or extenuating circumstances. The applicable fund
or funds shall be reimbursed for any amounts paid under this
Section, Section 830-30, Section 830-35, Section 830-45,
Section 830-50, or Section 830-55 upon liquidation of the
collateral. The Authority, by resolution of the Board, may
borrow sums from a fund or funds and provide for repayment as
soon as may be practical upon receipt of payments of principal
and interest by a borrower on loans subject to a State
Guarantee under this Section, Section 830-30, Section 830-35,
Section 830-45, Section 830-50, or Section 830-55. Money may be
borrowed from the Fund by the Authority for the sole purpose of
paying certain interest costs for borrowers associated with
selling a loan subject to a State Guarantee under this Section,
Section 83030, Section 83035, Section 830-45, Section
830-50, or Section 830-55 in a secondary market as may be
deemed reasonable and necessary by the Authority.
    (d) Notwithstanding the provisions of this Section with
respect to the qualified veteran-owned small businesses and
lenders who may obtain State Guarantees, the Authority may
adopt rules establishing the eligibility of qualified
veteran-owned small businesses and lenders to participate in
the State Guarantee program and the terms, standards, and
procedures that will apply, if the Authority finds that
emergency conditions in Illinois have created the need for
State Guarantees pursuant to terms, standards, and procedures
other than those specified in this Section.
 
    (20 ILCS 3501/835-25 new)
    Sec. 835-25. Authority administrative expenses. For
fiscal years 2017 through 2019, the Authority is authorized to
reimburse itself for the ordinary and necessary expenses of
administering the State Guarantee program under this Article
from amounts from time to time available in the Industrial
Project Insurance Fund in amounts not to exceed: (1) $275,000
in fiscal year 2017; and (2) $200,000 per fiscal year in fiscal
years 2018 and 2019. Ordinary and necessary expenses of
administering those State Guarantee programs include, without
limitation, costs of general administration, staff, accounting
and auditing services, legal services, judgments, loan
servicing, realization upon collateral, communications with
borrowers and lenders, and similar expenses, all to the extent
reasonably allocable to such State Guarantee programs.
    This Section is repealed on August 1, 2019.
 
    Section 99. Effective date. This Act takes effect upon
becoming law.