162-A:13 Capital Asset Backed Guarantee Program. –
I. Upon recommendation of the authority for the proper implementation of the declared purposes of this chapter, the governor and council may award a state guarantee of the principal of, interest on, and reasonable collection expenses related to, loans which meet the requirements set forth in this section. Such state guarantee shall not at any time exceed 90 percent of the principal, interest and related reasonable collection expenses with respect to such loan. The full faith and credit of the state shall be pledged for any such guarantee; provided that the guarantee shall not cause the contingent credit limit of RSA 162-A:22 to be exceeded.
II. The state's guarantee of a loan under this section shall be evidenced by a guarantee agreement entered into by the state, the lender and the borrower. Such guarantee agreement shall contain such terms and conditions as the authority and the governor and council may impose, including, without limitation, restrictions on the use of loan proceeds, restrictions on the use and operation of any project financed or assisted by the loan, appropriate controls on the requisition of loan proceeds by the borrower, provisions for the state to demand acceleration of the payment of the loan in the event of a default by the borrower, provisions for payment to the authority of guarantee fees and reimbursement of costs and expenses, provisions for reimbursement of the state if the state is required to honor the guarantee, appropriate financial covenants, and provisions for the establishment of reserves. In addition, as a condition of awarding any guarantee, the state shall be subrogated to all of the rights and security of the lender to the extent it honors the guarantee. Any guarantee agreement authorized in accordance with this section shall be executed on behalf of the state by the chairperson, vice chairperson, or executive director of the authority. The governor, with the advice and consent of the council, is authorized to draw a warrant for such sum as may be necessary out of money in the state treasury not otherwise appropriated, for the purpose of honoring any guarantee awarded under this section.
III. Any loan guaranteed under this section shall meet the following minimum requirements.
(a) The authority shall have received an appraisal of an independent party which shall state that the appraised fair market value equals or exceeds 125 percent of the total debt secured by the property.
(b) The authority shall have received a certification from the lender and the borrower which shall state that no more than 40 percent of the total principal amount of the loan shall be used to finance working capital.
(c) The final maturity date of the loan shall not be later than the later of 10 years from the date the loan was made or 10 years from the date the project was placed in service, provided that each loan may be renewed or refinanced for up to 2 additional 10-year periods.
(d) After the project has been placed in service, the principal balance of the loan shall be scheduled to be reduced annually by an amount equal to not less than the principal amount that would be paid under a 20-year amortization schedule requiring fixed annual payments, to be applied to accrued interest first with any excess to principal, and a fixed interest rate not less than the interest rate in effect on the date the loan becomes effective, provided that in connection with any renewal of a loan such principal reduction shall not be required.
(e) Nine months before the maturity date of any loan the borrower shall be required to give written notice to the authority of whether or not it intends to seek a renewal of the loan.
IV. The amount of any guarantee awarded under this section shall be reduced in proportion to any reduction in the principal balance of the loan.
V. The governor and council shall not award or renew any state guarantee under this section unless after a hearing they have made the findings specified in RSA 162-A:18.