4-17-408 - Approval or denial of application Investigation.
4-17-408. Approval or denial of application Investigation.
(a) The corporation is hereby authorized to approve or deny, by a majority vote of the board of directors, the guaranty of any revenue bonds issued pursuant to this part.
(b) Any applicant for financing from the corporation requesting a guaranty of the bonds issued by the corporation under this part must submit a guaranty application, in a form acceptable to the corporation, together with supporting documentation to the corporation as provided in this section.
(c) The corporation shall charge a premium payment to all applicants requesting a guaranty in an amount and payable at such times as shall be determined by the board of directors.
(d) All applications for a guaranty must be accompanied by documentation, providing that loans be secured by collateral acceptable to the board of directors, which collateral may include a lien on the property financed and a personal guarantee by the principal owner of the business being financed.
(e) All applications (except the identity of the applicants) and supporting documents, including personal financial records, trade secrets, or proprietary information of applicants, and all staff meetings or portions thereof conducted for the purpose of reviewing such applications shall be confidential and exempt from the provisions of title 8, chapter 44.
(f) If the application for a guaranty is approved by the corporation, the corporation and the applicant shall enter into a guaranty agreement. In accordance with the provisions of the guaranty agreement, the corporation guarantees to use the funds on deposit in its guaranty fund to meet amortization payments on the bonds as they become due, in the event and to the extent that the applicant is unable to meet such payments in accordance with the terms of the indenture when called to do so by the trustee of the bondholders. Whenever the corporation, acting under the terms of the guaranty agreement, deems it necessary to assume the obligation of maintenance of any project financed with bond proceeds, the corporation may use funds on deposit in its guaranty fund to pay insurance and maintenance costs required for the preservation of the project and to protect the guaranty fund from loss, or to minimize losses, in such manner as deemed necessary and advisable by the corporation.
(g) In the event the corporation does not approve the application for a guaranty, the applicant shall be notified in writing of the corporation's determination that the application was not approved.
(h) The board of directors of the corporation is authorized and directed to conduct such investigation as it may deem necessary for promulgation of regulations to govern the operation of the guaranty program authorized by this section. The regulations may include such other additional provisions, restrictions, and conditions as the corporation, after its investigation referred to in this subsection (h), shall determine to be proper to achieve the most effective utilization of the guaranty program. This may include, without limitation, a detailing of the remedies that must be exhausted by the bondholders, or a trustee acting on their behalf, prior to calling upon the corporation to perform under its guaranty agreement and the subrogation of other rights of the corporation with reference to the project and its operation or the financing, in the event the corporation makes payment pursuant to the applicable guaranty agreement. The regulations promulgated by the corporation to govern the operation of the guaranty program shall contain specific provisions with respect to the rights of the corporation to enter, take over, and manage all financed properties upon default. These regulations shall set forth the respective rights of the corporation and the bondholders in regard thereto.
[Acts 1995, ch. 443, § 8.]