20 ILCS 3501/830-35
2021 Illinois Compiled Statutes|Chapter 20 - EXECUTIVE BRANCH|20 ILCS 3501/ - Illinois Finance Authority Act.|Article 830 - Agricultural Assistance

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, or used by the Authority to make direct loans or originate or purchase loan participations under subsection (i) or (r) of Section 801-40. All interest earned from these investments shall be  deposited into the Fund until the Fund reaches the maximum 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. All earnings on direct loans or loan participations made by the Authority under subsection (i) or (r) of Section 801-40 with amounts in this Fund shall become funds of the Authority. The Authority is authorized to transfer 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,  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 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, 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, 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, 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. 100-919, eff. 8-17-18; 101-81, eff. 7-12-19.)