Bill
SB 1776
Expands Illinois' Young Farmer Loan Guarantee to a $1,000,000 cap and covers education debt and rent, boosting young farmers' access while raising state liability.
Status & Sponsors
- Bill: SB 1776 (Illinois)
- Primary sponsor: Sen. Michael W. Halpin
- Cosponsors/Chief Co‑sponsors: Sen. Doris Turner; Sen. Paul Faraci
- Introduced: Feb. 6, 2025 (LRB filing); effective date in text: “effective immediately”
- Action: Draft/introduced in 2025–2026 General Assembly session
Purpose
- Amend the Illinois Finance Authority Act to expand and clarify the State’s loan guarantee support for young farmers, including (1) increasing maximum State Guarantee amounts, (2) allowing guarantees for post‑secondary agricultural tuition debt, and (3) permitting certain rental payments to be financed under working capital guarantees.
Key provisions and changes
- Young Farmer Loan Guarantee Program (amendment to 20 ILCS 3501/830‑45)
- Increases the per‑young‑farmer cap on State Guarantees from $500,000 to $1,000,000.
- Confirms eligibility criteria for a “young farmer” (resident, 18+, principal farm operator; at least 50% of gross income from farming; net worth not less than $10,000; debt‑to‑asset ratio specified in statute and to be set by the Authority).
- Permits State Guarantees to be set on a payment schedule “not to exceed 30 years” while the guarantee itself “shall be no longer than 15 years in duration” (text language).
- Allows a young farmer to use the program more than once provided aggregate State Guarantees to that farmer do not exceed the statutory cap.
- Requires 90‑day written notice before revoking a State Guarantee.
- Authority may accept collateral at least equal to the State Guarantee and determine additional underwriting terms.
- Lender obligations: pay an annual fee equal to 25 basis points (0.25%) on the loan; be responsible for collection/legal costs; remain at risk for the first 15% of outstanding principal.
New/expanded eligible uses
Working Capital Loan Guarantee Program (amendment to 20 ILCS 3501/830‑55)
Funding/security
Who would be affected
- Primary beneficiaries: young farmers in Illinois who meet the statutory eligibility criteria (increased access to larger guaranteed loans; new ability to finance education-related debt and rental obligations).
- Lenders: authorized to participate under specified underwriting, fee, collateral and risk (first‑loss of 15%) requirements.
- Illinois Finance Authority: expanded program responsibilities, rulemaking discretion, and exposure to higher guarantee limits.
- State funds and potentially taxpayers: increased maximum guarantee exposure ($1,000,000 cap per young farmer) may raise contingent liabilities for the State guarantee funds.
Procedural/timing notes
- The bill’s language specifies “effective immediately” if enacted.
- Lender fee (0.25% annually), collateral and first‑loss requirements are baked into program terms; the Authority retains discretion to set further eligibility standards and to adopt rules, and may use alternative terms during declared emergency agricultural conditions.
Potential impacts
- Expands financing tools for young farmers—may improve access to capital for land rental, operating inputs, and agricultural education debt.
- Increases the State’s potential contingent liabilities by doubling the per‑farmer guarantee maximum under the Young Farmer program.
- Shifts some lender responsibility through a required annual fee and a 15% first‑loss risk, but increases State backing overall.
Compiled from official sources — confirm details with the bill’s official record.
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