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Illinois Senate Bill SB1776

Illinois 2025-2026 Regular Session

Illinois Senate Bill SB1776 Compare Versions

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11 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB1776 Introduced 2/5/2025, by Sen. Michael W. Halpin - Doris Turner SYNOPSIS AS INTRODUCED: 20 ILCS 3501/830-4520 ILCS 3501/830-55 Amends the Illinois Finance Authority Act. In provisions concerning the Young Farmer Loan Guarantee Program, provides that State Guarantees under the program shall not exceed $1,000,000 (currently $500,000) per young farmer. Provides that the Illinois Finance Authority is authorized to issue State Guarantees to lenders for loans to finance or refinance tuition debt incurred by or on behalf of an eligible farmer for post-secondary education in an agriculture field. Provides that the Illinois Finance Authority may use moneys under the Working Capital Loan Guarantee Program to finance rental payments for land leased to the farmer. Provides that State Guarantees provided under the Working Capital Loan Guarantee Program may not exceed $500,000 per borrower. Effective immediately LRB104 11449 HLH 21537 b A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB1776 Introduced 2/5/2025, by Sen. Michael W. Halpin - Doris Turner SYNOPSIS AS INTRODUCED: 20 ILCS 3501/830-4520 ILCS 3501/830-55 20 ILCS 3501/830-45 20 ILCS 3501/830-55 Amends the Illinois Finance Authority Act. In provisions concerning the Young Farmer Loan Guarantee Program, provides that State Guarantees under the program shall not exceed $1,000,000 (currently $500,000) per young farmer. Provides that the Illinois Finance Authority is authorized to issue State Guarantees to lenders for loans to finance or refinance tuition debt incurred by or on behalf of an eligible farmer for post-secondary education in an agriculture field. Provides that the Illinois Finance Authority may use moneys under the Working Capital Loan Guarantee Program to finance rental payments for land leased to the farmer. Provides that State Guarantees provided under the Working Capital Loan Guarantee Program may not exceed $500,000 per borrower. Effective immediately LRB104 11449 HLH 21537 b LRB104 11449 HLH 21537 b A BILL FOR
22 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB1776 Introduced 2/5/2025, by Sen. Michael W. Halpin - Doris Turner SYNOPSIS AS INTRODUCED:
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66 Amends the Illinois Finance Authority Act. In provisions concerning the Young Farmer Loan Guarantee Program, provides that State Guarantees under the program shall not exceed $1,000,000 (currently $500,000) per young farmer. Provides that the Illinois Finance Authority is authorized to issue State Guarantees to lenders for loans to finance or refinance tuition debt incurred by or on behalf of an eligible farmer for post-secondary education in an agriculture field. Provides that the Illinois Finance Authority may use moneys under the Working Capital Loan Guarantee Program to finance rental payments for land leased to the farmer. Provides that State Guarantees provided under the Working Capital Loan Guarantee Program may not exceed $500,000 per borrower. Effective immediately
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1212 1 AN ACT concerning finance.
1313 2 Be it enacted by the People of the State of Illinois,
1414 3 represented in the General Assembly:
1515 4 Section 5. The Illinois Finance Authority Act is amended
1616 5 by changing Sections 830-45 and 830-55 as follows:
1717 6 (20 ILCS 3501/830-45)
1818 7 Sec. 830-45. Young Farmer Loan Guarantee Program.
1919 8 (a) The Authority is authorized to issue State Guarantees
2020 9 to lenders for loans to finance or refinance debts of young
2121 10 farmers. For the purposes of this Section, a young farmer is a
2222 11 resident of Illinois who is at least 18 years of age and who is
2323 12 a principal operator of a farm or land, who derives at least
2424 13 50% of annual gross income from farming, whose net worth is not
2525 14 less than $10,000 and whose debt to asset ratio is not less
2626 15 than 40%. For the purposes of this Section, debt to asset ratio
2727 16 means current outstanding liabilities, including any debt to
2828 17 be financed or refinanced under this Section 830-45, divided
2929 18 by current outstanding assets. The Authority shall establish
3030 19 the maximum permissible debt to asset ratio based on criteria
3131 20 established by the Authority. Lenders shall apply for the
3232 21 State Guarantees on forms provided by the Authority and
3333 22 certify that the application and any other documents submitted
3434 23 are true and correct. The lender or borrower, or both in
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3838 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB1776 Introduced 2/5/2025, by Sen. Michael W. Halpin - Doris Turner SYNOPSIS AS INTRODUCED:
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4242 Amends the Illinois Finance Authority Act. In provisions concerning the Young Farmer Loan Guarantee Program, provides that State Guarantees under the program shall not exceed $1,000,000 (currently $500,000) per young farmer. Provides that the Illinois Finance Authority is authorized to issue State Guarantees to lenders for loans to finance or refinance tuition debt incurred by or on behalf of an eligible farmer for post-secondary education in an agriculture field. Provides that the Illinois Finance Authority may use moneys under the Working Capital Loan Guarantee Program to finance rental payments for land leased to the farmer. Provides that State Guarantees provided under the Working Capital Loan Guarantee Program may not exceed $500,000 per borrower. Effective immediately
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7171 1 combination, shall pay an administrative fee as determined by
7272 2 the Authority. The applicant shall be responsible for paying
7373 3 any fee or charge involved in recording mortgages, releases,
7474 4 financing statements, insurance for secondary market issues,
7575 5 and any other similar fee or charge that the Authority may
7676 6 require. The application shall at a minimum contain the young
7777 7 farmer's name, address, present credit and financial
7878 8 information, including cash flow statements, financial
7979 9 statements, balance sheets, and any other information
8080 10 pertinent to the application, and the collateral to be used to
8181 11 secure the State Guarantee. In addition, the borrower must
8282 12 certify to the Authority that, at the time the State Guarantee
8383 13 is provided, the borrower will not be delinquent in the
8484 14 repayment of any debt. The lender must agree to charge a fixed
8585 15 or adjustable interest rate that the Authority determines to
8686 16 be below the market rate of interest generally available to
8787 17 the borrower. If both the lender and applicant agree, the
8888 18 interest rate on the State guaranteed loan can be converted to
8989 19 a fixed interest rate at any time during the term of the loan.
9090 20 State Guarantees provided under this Section (i) shall not
9191 21 exceed $1,000,000 $500,000 per young farmer, (ii) shall be set
9292 22 up on a payment schedule not to exceed 30 years, but shall be
9393 23 no longer than 15 years in duration, and (iii) shall be subject
9494 24 to an annual review and renewal by the lender and the
9595 25 Authority. A young farmer may use this program more than once
9696 26 provided the aggregate principal amount of State Guarantees
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107107 1 under this Section to that young farmer does not exceed
108108 2 $1,000,000 $500,000. No State Guarantee shall be revoked by
109109 3 the Authority without a 90-day notice, in writing, to all
110110 4 parties.
111111 5 (b) The Authority shall provide or renew a State Guarantee
112112 6 to a lender if:
113113 7 (i) The lender pays a fee equal to 25 basis points on
114114 8 the loan to the Authority on an annual basis.
115115 9 (ii) The application provides collateral acceptable to
116116 10 the Authority that is at least equal to the State
117117 11 Guarantee.
118118 12 (iii) The lender assumes all responsibility and costs
119119 13 for pursuing legal action on collecting any loan that is
120120 14 delinquent or in default.
121121 15 (iv) The lender is at risk for the first 15% of the
122122 16 outstanding principal of the note for which the State
123123 17 Guarantee is provided.
124124 18 (c) The Illinois Agricultural Loan Guarantee Fund, the
125125 19 Illinois Farmer and Agribusiness Loan Guarantee Fund, and the
126126 20 Industrial Project Insurance Fund may be used to secure State
127127 21 Guarantees issued under this Section as provided in Section
128128 22 830-30, Section 830-35, and subsection (j) of Section 805-20,
129129 23 respectively. All payments by the Authority to satisfy claims
130130 24 against the State Guarantee shall be made, in whole or in part,
131131 25 from any of the following funds in such order and in such
132132 26 amounts as the Authority shall determine: (1) the Industrial
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143143 1 Project Insurance Fund (if the Authority exercises its
144144 2 discretion under subsection (j) of Section 805-20); (2) the
145145 3 Illinois Agricultural Loan Guarantee Fund; or (3) the Illinois
146146 4 Farmer and Agribusiness Loan Guarantee Fund.
147147 5 (d) Notwithstanding the provisions of this Section 830-45
148148 6 with respect to the young farmers and lenders who may obtain
149149 7 State Guarantees, the Authority may promulgate rules
150150 8 establishing the eligibility of young farmers and lenders to
151151 9 participate in the State Guarantee program and the terms,
152152 10 standards, and procedures that will apply, when the Authority
153153 11 finds that emergency conditions in Illinois agriculture have
154154 12 created the need for State Guarantees pursuant to terms,
155155 13 standards, and procedures other than those specified in this
156156 14 Section.
157157 15 (e) The Authority shall allow for the payment of tuition
158158 16 debt incurred by the young farmer to be eligible for financing
159159 17 and refinancing with the loans awarded pursuant to this
160160 18 Section. The Authority shall allow the an eligible young
161161 19 farmer to pay rent and past rent on land leased to the young
162162 20 farmer with the loans awarded pursuant to this Section.
163163 21 (Source: P.A. 99-509, eff. 6-24-16.)
164164 22 (20 ILCS 3501/830-55)
165165 23 Sec. 830-55. Working Capital Loan Guarantee Programs
166166 24 Program.
167167 25 (a) The Authority is authorized to issue State Guarantees
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178178 1 to lenders for loans to finance needed input costs related to
179179 2 and in connection with planting and raising agricultural crops
180180 3 and commodities in Illinois as well as rental payments for
181181 4 land leased to the farmer for those purposes. Eligible input
182182 5 costs include, but are not limited to, fertilizer, chemicals,
183183 6 feed, seed, fuel, parts, and repairs. At the discretion of the
184184 7 Authority, the farmer, producer, or agribusiness must be able
185185 8 to provide the originating lender with a first lien on the
186186 9 proposed crop or commodity to be raised and an assignment of
187187 10 Federal Crop Insurance sufficient to secure the Working
188188 11 Capital Loan. Additional collateral may be required as deemed
189189 12 necessary by the lender and the Authority.
190190 13 In addition, the Authority is authorized to issue State
191191 14 Guarantees to lenders for loans to finance or refinance
192192 15 tuition debt incurred by or on behalf of an eligible farmer for
193193 16 the purpose of pursuing an associate's degree in an
194194 17 agriculture field, a bachelor's degree in an agriculture
195195 18 field, or a post-secondary certificate in a agriculture field.
196196 19 Eligible tuition debt includes all fees, administrative costs,
197197 20 and living expenses imposed by the post-secondary education
198198 21 institution.
199199 22 For the purposes of this Section, an eligible farmer,
200200 23 producer, or agribusiness is a resident of Illinois who is at
201201 24 least 18 years of age and who is a principal operator of a farm
202202 25 or land, who derives at least 50% of annual gross income from
203203 26 farming, and whose debt to asset ratio is not less than 40%.
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214214 1 For the purposes of this Section, debt to asset ratio means
215215 2 current outstanding liabilities, including any debt to be
216216 3 financed or refinanced under this Section 830-55, divided by
217217 4 current outstanding assets. The Authority shall establish the
218218 5 maximum permissible debt to asset ratio based on criteria
219219 6 established by the Authority. Lenders shall apply for the
220220 7 State Guarantees on forms provided by the Authority and
221221 8 certify that the application and any other documents submitted
222222 9 are true and correct. The lender or borrower, or both in
223223 10 combination, shall pay an administrative fee as determined by
224224 11 the Authority. The applicant shall be responsible for paying
225225 12 any fee or charge involved in recording mortgages, releases,
226226 13 financing statements, insurance for secondary market issues,
227227 14 and any other similar fee or charge that the Authority may
228228 15 require. The application shall at a minimum contain the
229229 16 borrower's name, address, present credit and financial
230230 17 information, including cash flow statements, financial
231231 18 statements, balance sheets, and any other information
232232 19 pertinent to the application, and the collateral to be used to
233233 20 secure the State Guarantee. In addition, the borrower must
234234 21 certify to the Authority that, at the time the State Guarantee
235235 22 is provided, the borrower will not be delinquent in the
236236 23 repayment of any debt. The lender must agree to charge a fixed
237237 24 or adjustable interest rate that the Authority determines to
238238 25 be below the market rate of interest generally available to
239239 26 the borrower. If both the lender and applicant agree, the
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250250 1 interest rate on the State guaranteed loan can be converted to
251251 2 a fixed interest rate at any time during the term of the loan.
252252 3 State Guarantees provided under this Section (i) shall not
253253 4 exceed $500,000 $250,000 per borrower, (ii) shall be repaid
254254 5 annually, and (iii) shall be subject to an annual review and
255255 6 renewal by the lender and the Authority. The State Guarantee
256256 7 may be renewed annually, for a period not to exceed 3 total
257257 8 years per State Guarantee, if the borrower meets financial
258258 9 criteria and other conditions, as established by the
259259 10 Authority. A farmer or agribusiness may use this program more
260260 11 than once provided the aggregate principal amount of State
261261 12 Guarantees under this Section to that farmer or agribusiness
262262 13 does not exceed $500,000 $250,000 annually. No State Guarantee
263263 14 shall be revoked by the Authority without a 90-day notice, in
264264 15 writing, to all parties.
265265 16 (b) The Authority shall provide a State Guarantee to a
266266 17 lender if:
267267 18 (i) The borrower pays to the Authority a fee equal to
268268 19 100 basis points on the loan.
269269 20 (ii) The application provides collateral acceptable to
270270 21 the Authority that is at least equal to the State
271271 22 Guarantee.
272272 23 (iii) The lender assumes all responsibility and costs
273273 24 for pursuing legal action on collecting any loan that is
274274 25 delinquent or in default.
275275 26 (iv) The lender is at risk for the first 15% of the
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286286 1 outstanding principal of the note for which the State
287287 2 Guarantee is provided.
288288 3 (c) The Illinois Agricultural Loan Guarantee Fund, the
289289 4 Illinois Farmer and Agribusiness Loan Guarantee Fund, and the
290290 5 Industrial Project Insurance Fund may be used to secure State
291291 6 Guarantees issued under this Section as provided in Section
292292 7 830-30, Section 830-35, and subsection (j) of Section 805-20,
293293 8 respectively, or to make direct loans or purchase loan
294294 9 participations under subsection (i) or (r) of Section 801-40.
295295 10 If the Authority exercises its discretion under subsection (j)
296296 11 of Section 805-20 to secure a State Guarantee with the
297297 12 Industrial Project Insurance Fund and also exercises its
298298 13 discretion under this subsection to secure the same State
299299 14 Guarantee with the Illinois Agricultural Loan Guarantee Fund,
300300 15 the Illinois Farmer and Agribusiness Loan Guarantee Fund, or
301301 16 both, all payments by the Authority to satisfy claims against
302302 17 the State Guarantee shall be made from the Industrial Project
303303 18 Insurance Fund, the Illinois Agricultural Loan Guarantee Fund,
304304 19 or the Illinois Farmer and Agribusiness Loan Guarantee Fund,
305305 20 as applicable, in such order and in such amounts as the
306306 21 Authority shall determine.
307307 22 (d) Notwithstanding the provisions of this Section 830-55
308308 23 with respect to the borrowers and lenders who may obtain State
309309 24 Guarantees, the Authority may promulgate rules establishing
310310 25 the eligibility of borrowers and lenders to participate in the
311311 26 State Guarantee program and the terms, standards, and
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322322 1 procedures that will apply, when the Authority finds that
323323 2 emergency conditions in Illinois agriculture have created the
324324 3 need for State Guarantees pursuant to terms, standards, and
325325 4 procedures other than those specified in this Section.
326326 5 (Source: P.A. 100-919, eff. 8-17-18; 101-81, eff. 7-12-19.)
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