162-A:12 Capital Access Program. –
I. The authority may contribute money to funds, to be known as "CAP funds," that shall be held for the benefit of participating state banks and state credit unions. Each such fund shall be held by the authority separate and apart from all other funds of the authority and shall be held exclusively to secure principal of and interest on CAP loans made by a participating state bank or state credit union.
II. The amount of the authority's contribution to a CAP fund shall not exceed 10 percent of the principal amount of the CAP loans to be secured by the CAP fund. As a condition of the authority making a contribution to a CAP fund, the authority may require the borrower or the participating state bank or state credit union to make a contribution to the CAP fund and may impose such other conditions or requirements as the authority may deem necessary or desirable; provided that no veteran-owned business borrower shall be required to pay a fee or contribution into the CAP fund. All moneys contributed to a CAP fund shall be held in the name of the authority. Investment earnings on the CAP fund shall be credited to the fund, and such earnings shall be periodically paid to the authority unless the CAP participation agreement otherwise provides. For the purposes of this paragraph, "veteran" means veteran as defined in 38 U.S.C. section 101(2).
III. Prior to establishing a CAP fund at a participating state bank or state credit union, the authority shall enter into a CAP participation agreement with the participating state bank or state credit union. The CAP participation agreement shall specify:
(a) The maximum amount of the authority's contributions to the CAP fund.
(b) The conditions under which the authority will make contributions to the CAP fund.
(c) The conditions under which the participating state bank or state credit union may demand payment from a CAP fund to pay a defaulted CAP loan.
(d) Minimum due diligence procedures for servicing CAP loans.
(e) Conditions under which the participating state bank, or state credit union, or other borrower will be required to contribute to the CAP fund.
(f) Provision for the payment of authority fees, costs, and expenses from earnings on the CAP fund or otherwise.
(g) Provisions for the termination of the CAP fund, in whole or in part, and disbursement of any excesses in the CAP fund.
(h) Criteria and procedures for qualifying a loan as a CAP loan.
(i) Requirements that the participating state bank or state credit union report to the authority not less often than annually regarding outstanding balances on CAP loans, delinquent CAP loans and such other information as the authority may deem appropriate.
(j) Permitted investments in the CAP fund.
(k) Other terms and conditions as the authority may deem necessary or desirable.
IV. (a) At a minimum, CAP loans shall meet the following requirements:
(1) The borrower is either a start-up business or did not have annual sales in its most recently completed fiscal year of greater than $5,000,000.
(2) The total outstanding principal amount of CAP loans to the borrower does not exceed $500,000.
(3) The proceeds of the CAP loan shall be used for business purposes.
(b) The authority may from time to time impose requirements on CAP loans in addition to those contained in subparagraph (a) or in a CAP participation agreement by written notice to participating state banks and state credit unions, but such additional requirements shall not apply to CAP loans already made, or to CAP loans for which written commitments exist, provided CAP loans from these written commitments are made within 3 months of the date of the written notice. Such notices shall not constitute rules within the meaning of RSA 541-A.
V. The authority shall not initially fund any CAP fund or enter into a CAP participation agreement or any material amendment to a CAP participation agreement, unless after a hearing the governor and council have made the findings specified in RSA 162-A:18.