1. The board may create a loan guarantee account to offer loan guarantees for the following purposes:
a. All or a portion of the expenses incurred by the applicant for its share of corrective action.
b. Tank and monitoring equipment improvements necessary to satisfy federal technical standards to become insurable.
c. Capital improvements made on a tank site.
d. Purchase of a leaking underground storage tank site.
Moneys from the revenues derived from the use tax under section 423.24, subsection 1, paragraph "a", subparagraph (1), may be used to fund the loan guarantee account according to the fund budget as approved by the board. Loan guarantees shall be made on terms and conditions determined by the board to be reasonable, except that in no case may a loan guarantee satisfy more than ninety percent of the outstanding balance of a loan.
2. A separate nonlapsing loan guarantee account is created within the fund. Any funds remaining in the account at the end of each fiscal year shall not revert to the general fund but shall remain in the account. The loan account shall be maintained by the treasurer of state. All expenses incurred by the loan account shall be payable solely from the loan account and no liability or obligation shall be imposed upon the state beyond this amount.
3. The board shall administer the loan guarantee account. The board may delegate administration of the account, provided that the administrator is subject to the board's direct supervision and direction. The board shall adopt rules regarding the provision of loan guarantees. The board may impose such terms and conditions as it deems reasonable and necessary or appropriate. The board shall take appropriate steps to publicize the existence of the loan account.
4. In calculating the net worth of an applicant for a loan guarantee, the board shall use the fair market value of any property on which a tank is sited, and not the precorrective action value required for recovery of gain upon later sale of the same property under section 455G.9, subsection 5.
5. As a condition of eligibility for financial assistance from the loan guarantee account, an applicant shall demonstrate satisfactory attempts to obtain financing from private lending sources. When applying for loan guarantee account assistance, the applicant shall demonstrate good faith attempts to obtain financing from at least two financial institutions. The board may first refer a tank owner or operator to a financial institution eligible to participate in the fund under section 455G.16; however, if no such financial institution is currently willing or able to make the required loan, the applicant shall determine if any of the previously contacted financial institutions would make the loan in participation with the loan guarantee account. The loan guarantee account may offer to guarantee a loan, or provide other forms of financial assistance to facilitate a private loan.
6. The maturity for each financial assistance package made by the board pursuant to this chapter shall be the shortest feasible term commensurate with the repayment ability of the borrower. However, the maturity date of a loan shall not exceed twenty years and the guarantee is ineffective beyond the agreed term of the guarantee or twenty years from initiation of the guarantee, whichever term is shorter.
7. The source of funds for the loan account shall be from the following:
a. Loan guarantee account income, including loan guarantee service fees, if any, and investment income attributed to the account by the board.
b. Moneys allocated to the account by the board according to the fund budget approved by the board.
c. Moneys appropriated by the federal government or general assembly and made available to the loan account.
8. A loan loss reserve account shall be established within the loan guarantee account. A default on a loan guaranteed under this section shall be paid from such reserve account. In administering the program, the board shall periodically determine the necessary loan loss reserve needed and shall set aside the appropriate moneys in the loan loss reserve account for payment of loan defaults. This reserve shall be determined based on the credit quality of the outstanding guaranteed loans at the time that the reserve requirement is being determined. A default is not eligible for payment until the lender has satisfied all administrative and legal remedies for settlement of the loan and the loan has been reduced to judgment by the lender. After the default has been reduced to judgment and the guarantee paid from the reserve account, the board is entitled to an assignment of the judgment. The board shall take all appropriate action to enforce the judgment or may enter into an agreement with the lender to provide for enforcement. Upon collection of the amount guaranteed, any excess collected shall be deposited into the fund. The general assembly is not obligated to appropriate any moneys to pay for any defaults or to appropriate any moneys to be credited to the reserve account. The loan guarantee program does not obligate the state or the board except to the extent provided in this section, and the board in administering the program shall not give or lend the credit of the state of Iowa.
89 Acts, ch 131, §51; 90 Acts, ch 1235, § 29-32; 91 Acts, ch 252, §25; 93 Acts, ch 155, §5; 95 Acts, ch 215, §18
Referred to in § 455G.3
Section repealed effective July 1, 1999; repeal shall not affect outstanding contractual rights; 89 Acts, ch 131, § 62
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