20 ILCS 3501/830-30
2021 Illinois Compiled Statutes|Chapter 20 - EXECUTIVE BRANCH|20 ILCS 3501/ - Illinois Finance Authority Act.|Article 830 - Agricultural Assistance

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 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 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. 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 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 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. 100-919, eff. 8-17-18; 101-81, eff. 7-12-19.)