(20 ILCS 3501/Art. 805 heading)
ARTICLE 805
INDUSTRIAL REVENUE BOND INSURANCE FUND
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(20 ILCS 3501/805-5)
Sec. 805-5. Findings and Declaration of Policy. It is hereby found and
declared that a continuing need exists to maintain and develop the State's
economy; that there are significant barriers in the capital markets inhibiting
the issuance by the Authority of industrial revenue bonds, loans, and State Guarantees to assist in
financing
industrial projects, farmers, and agribusiness in the State, particularly for smaller firms; and that the
establishment of the Industrial Revenue Bond Insurance Fund and the exercise by
the Authority of the powers granted in
this Article will promote
economic development by widening the market for the Authority's revenue bonds, loans, and State Guarantees.
(Source: P.A. 96-897, eff. 5-24-10.)
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(20 ILCS 3501/805-10)
Sec. 805-10.
Definitions.
The following terms, whenever used or referred
to in this Article, shall have the following meanings ascribed to them, except
where the context clearly requires otherwise:
(a) "Financial Institution" means a financial institution which is a trust
company, a bank, a savings bank, a credit union, an investment bank, a broker,
an investment trust, a pension fund, a building and loan association, a savings
and loan association, an insurance company, or any other institution acceptable
to the Authority, authorized to do business in the State and approved by the
Authority to insure bonds or loans for industrial projects authorized by this
Act.
(b) "Participating lender" means any trust company, bank, savings bank,
credit
union, investment bank, broker, investment trust, pension fund, building and
loan association, savings and loan association, insurance company or other
institution approved by the Authority which assumes a portion of the risk on a
loan for an industrial project as provided in
Section 805-30 of this Act.
(Source: P.A. 93-205, eff. 1-1-04.)
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(20 ILCS 3501/805-15)
Sec. 805-15. Industrial Project Insurance Fund. There is created the
Industrial Project Insurance Fund, hereafter referred to in
Sections 805-15
through 805-50 of this Act as the "Fund". The Treasurer shall have custody of
the
Fund, which shall be held outside of the State treasury, except that custody
may
be transferred to and held by any bank, trust company or other fiduciary with
whom the Authority executes a trust agreement as authorized by paragraph (h) of
Section 805-20 of this Act. Any portion of the Fund against which a charge has
been made, shall be held for the benefit of the holders of the loans or bonds
insured under
Section 805-20 of this Act or the holders of State Guarantees under Article 830 of this Act.
There shall be deposited in the Fund such amounts, including but not limited
to:
(a) All receipts of bond and loan insurance premiums;
(b) All proceeds of assets of whatever nature received by the Authority as a
result of default or delinquency with respect to insured loans or bonds or State Guarantees with
respect to which payments from the Fund have been made, including proceeds from
the sale, disposal, lease or rental of real or personal property which the
Authority may receive under the provisions of
this Article but excluding the proceeds of insurance hereunder;
(c) All receipts from any applicable contract or agreement entered into by
the Authority under paragraph (b) of Section 805-20 of this Act;
(d) Any State appropriations, transfers of appropriations, or transfers of
general obligation bond proceeds or other monies made available to the Fund.
Amounts in the Fund shall be used in accordance with the provisions of
this Article to satisfy any valid insurance claim payable
therefrom and may be used for any other purpose determined by the Authority in
accordance with insurance contract or contracts with financial institutions
entered into pursuant to this Act, including without limitation protecting the
interest of the Authority in industrial projects during periods of loan
delinquency or upon loan default through the purchase of industrial projects in
foreclosure proceedings or in lieu of foreclosure or through any other means.
Such amounts may also be used to pay administrative costs and expenses
reasonably allocable to the activities in connection with the Fund and to pay
taxes, maintenance, insurance, security and any other costs and expenses of
bidding for, acquiring, owning, carrying and disposing of industrial projects
which were financed with the proceeds of insured bonds or loans. In the case of
a default in payment with respect to any loan, mortgage or other agreement so
insured, the amount of the default shall immediately, and at all times during
the continuance of such default, and to the extent provided in any applicable
agreement, constitute a charge on the Fund.
Any amounts in the Fund not currently needed to meet the obligations of the
Fund may be invested as provided by law in obligations designated by the
Authority,
and all income from such investments shall become part of the Fund. In making
such investments, the Authority shall act with the care, skill, diligence and
prudence under the circumstances of a prudent person acting in a like capacity
in the conduct of an enterprise of like character and with like aims. It shall
diversify such investments of the Authority so as to minimize the risk of large
losses, unless under the circumstances it is clearly not prudent to do so.
Amounts in the Fund may also be used to satisfy State Guarantees under Article 830 of this Act.
(Source: P.A. 96-897, eff. 5-24-10.)
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(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, or program under Article 830 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.)
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(20 ILCS 3501/805-25)
Sec. 805-25.
Insurance Contracts; Claim Responsibility.
Any contract of
insurance made by the Authority with a lender or bondholder or for the benefit
thereof under this Act shall provide that claims payable under such contract
shall be paid from any amounts available in the Fund and from any amounts
available under the terms of any applicable contract or agreement with other
financial institutions, in such order of priority as the Authority shall deem
appropriate. The obligation of the Authority to make payments under any such
contract shall be limited solely to the amounts provided in such contract and
shall not constitute a debt or liability of the State, the Authority or any
subdivision thereof.
Any insurance contract or other agreement with a lender or bondholder or for
the benefit thereof and any rule or regulation of the Authority implementing
the
insurance program may contain such other terms, provisions or conditions as the
Authority deems necessary or appropriate, including, without limitation, those
relating to the payment of insurance premiums, the giving of notice, claim
procedures, the sources of payment for claims, the priority of competing claims
for payment, the release or termination of loan security and borrower
liability, the timing of payment, the maintenance and disposition of industrial
projects
and the use of amounts received during periods of delinquency or upon default,
and any other provisions concerning the rights of insured parties or conditions
to the payment of insurance claims.
(Source: P.A. 93-205, eff. 1-1-04.)
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(20 ILCS 3501/805-30)
Sec. 805-30.
Applications for Insured Industrial Project Loans;
Procedures.
Applications received by the Authority shall be forwarded to a credit review
committee consisting of 3 persons experienced in industrial financing selected
by the Authority for a review and report concerning the advisability of
approving the proposed insurance. The review and report shall include facts
about the company's history, job opportunities, stability of employment,
financial condition and structure, income statements, market prospects and
management, and any other facts material to the insurance request. The report
shall include a reasoned opinion as to whether providing the insurance would
tend to fulfill the purposes of the Authority and the insurance program. The
report shall be advisory in nature only. Payment shall be made to the members
of the committee selected by the Authority on a reasonable consultant basis, as
the Authority may determine. The credit review committee shall be of such
composition, act for such time and have such powers as shall be specified in
the
agreement or agreements establishing its existence and, to the extent so
specified, shall act for the Authority in matters concerning the insurance
program authorized by
Sections 805-5 through 805-45 of this Act.
The Authority shall, on the basis of the application, the report of the credit
review committee, the information provided by the local or regional industrial
development agency, and any other appropriate information, prepare a report
concerning the creditworthiness of the proposed borrower, the loan record of
the participating lender, the financial commitment of the participating lender,
the manner in which the proposed industrial project will advance the economy of
the State and the soundness of the proposed loan.
The Fund, or any portion thereof against which a charge has been made, shall be
held for the benefit of the holders of the bonds or loans insured under
Section
805-20 of this Act, as provided by agreement between the Authority and such
holders.
The Authority shall be satisfied that the Fund is protected by adequate
security
on all bonds or loans insured by the Authority.
(Source: P.A. 93-205, eff. 1-1-04.)
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(20 ILCS 3501/805-35)
Sec. 805-35.
Loan Approval Standards.
Before approving any bond or loan
insurance under this Act, the Authority shall find that any loan insured by or
to be made from the proceeds of bonds insured by the Authority under this Act
shall:
(a) Be made for an industrial project or any environmental facility under
the Illinois Environmental Facilities Financing Act;
(b) Be made to a borrower approved by the Authority as responsible and
creditworthy;
(c) Be reviewed for insurance by the credit review committee established by
the Authority pursuant to this Act;
(d) In the case of real property, be secured by a first mortgage on the
property, or by any other security satisfactory to the Authority to secure
payment of the loans, and have a maturity date not later than 25 years after
the date of the loan;
(e) In the case of machinery and equipment, be secured by a first security
interest in the machinery and equipment, or by any other security satisfactory
to the Authority to secure payment of the loan, and have a maturity date not
later than 12 years from the date of the loan;
(f) Contain complete amortization provisions satisfactory to the Authority;
(g) Be in such principal amount and form, and contain such terms and
provisions with respect to property insurance, repairs, alterations, payment of
taxes and
assessments, delinquency charges, default remedies, additional security and
other matters as the Authority shall determine;
(h) Be made only after the Authority has made a determination that, in its
sole opinion, the loan has the potential to provide or retain substantial
employment
in relation to the principal amount of the loan to be insured, which
employment, so far as feasible, may be expected to be of residents of areas of
critical
labor surplus;
(i) Be made only after the Authority has made a determination that, in its
sole opinion, adequate provision is being or will be made to meet any increased
demand upon community public facilities that will likely result from the
project; and
(j) Be made only after the Authority has made a determination that, in its
sole opinion, the public interest is adequately protected by the terms of the
loan
and of the insurance contract or other agreements.
Any contract of insurance executed by the Authority under this Act shall be
conclusive evidence of eligibility for such insurance, and the validity of any
contract of insurance so executed or of an advance commitment to insure shall
be
incontestable in the hands of a borrower or bondholder from the date of
execution and delivery of the contract or commitment, except for fraud, or
misrepresentation on the part of the borrower and, as to commitments to insure,
noncompliance with the commitment or Authority rules or regulations in force at
the time of issuance of the commitment.
Nothing in this Act shall be construed as creating any rights of a competitor
of an approved borrower or any applicant whose application is denied by the
Authority to challenge any application which is accepted by the Authority and
any loan, contract of insurance or other agreement executed in connection
therewith.
(Source: P.A. 93-205, eff. 1-1-04.)
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(20 ILCS 3501/805-40)
Sec. 805-40.
Investments in Insured Debts of the Authority.
The State and
all
counties, municipalities and other public corporations, political subdivisions
and public bodies, and public officers of any thereof, all banks, bankers,
trust
companies, savings banks and institutions, building and loan associations,
savings and loan associations, investment companies and other persons carrying
on a banking business, all insurance companies, insurance associations and
other
persons carrying on an insurance business and all executors, administrators,
guardians, trustees and other fiduciaries may legally invest any sinking funds,
moneys or other funds belonging to them or within their control in any bonds,
loans or extension of credit which are the subject of insurance pursuant to
this Article, it being the purpose of this
Section to
authorize the investment of such bonds, loans or extension of credit of all
sinking, insurance, retirement, compensation, pension and trust funds, whether
owned or controlled by private or public persons or officers; provided,
however,
that nothing contained in this
Section may be construed as relieving any persons
from any duty of exercising reasonable care in selecting securities for
purchase
or investment.
The bonds and any loan or extension of credit which are the subject of
insurance
pursuant to
this Article are also hereby made securities which may
properly and legally be deposited with and received by all public officers and
bodies of the State or any agency or political subdivisions thereof and all
municipalities and public corporations for any purpose for which the deposit of
bonds is now or may hereafter be authorized by law.
(Source: P.A. 93-205, eff. 1-1-04.)
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(20 ILCS 3501/805-45)
Sec. 805-45.
Cooperation with Local Industrial Development Agencies.
When
the
Authority receives an application from a potential insured loan borrower, it
shall promptly notify the local industrial development agency of that fact in
writing if such an agency exists in the municipality or county where such
industrial project is proposed to be financed; or the corporate authorities in
such municipality where no such agency exists. The Authority shall provide the
local industrial development agency with any available information that the
agency needs to prepare a recommendation concerning the advisability of the
industrial project and its impact, economic and otherwise, on the community and
the State. Such application shall include a written authorization by the
applicant that such notification and information be made available to such
agency or municipality to the extent that such information is not deemed to be
confidential under
Section 805-50 of this Act. The Authority shall not consider
any application that does not include such written authorization.
The Authority shall encourage financial participation by local industrial
development agencies by giving priority consideration to insured loan
applicants
from areas serviced by those agencies that have demonstrated a commitment to
economic development.
(Source: P.A. 93-205, eff. 1-1-04.)
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(20 ILCS 3501/805-50)
Sec. 805-50.
Documentary material concerning trade secrets; Commercial or
financial information; Confidentiality. Any documentary materials or data made
or received by any member, agent, or employee of the Authority or the credit
review committees, to the extent that such materials or data consist of trade
secrets, commercial or financial information regarding the operation of any
enterprise conducted by an applicant for, or recipient of, any form of
assistance which the Authority is empowered to render under
this Article, or regarding the competitive position of such enterprise in a
particular field of endeavor, shall not be deemed public records.
(Source: P.A. 93-205, eff. 1-1-04.)
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