House Bill No. 95
Introduced By kitzenberg
A Bill for an Act entitled: "An Act amending the job investment act to allow the department of commerce to certify and make loans to intermediary lenders; and amending section
Be it enacted by the Legislature of the State of Montana:
NEW SECTION. Section 1. Certified intermediary lenders. (1) The department may make loans to private, nonprofit corporations established for economic development that have been certified as intermediary lenders by the department. The certified intermediary lenders may in turn lend the money received from the department to eligible Montana businesses, consistent with the provisions of this part.
(2) Loans made by the department to a certified intermediary lender:
(a) must be at 1% interest for a term not to exceed 30 years;
(b) may include a deferral period for principal payments of up to 3 years, which does not lengthen the term of the loan; and
(c) may not exceed a cumulative total of $1 million.
NEW SECTION. Section 2. Certification of intermediary lenders. The department shall provide for a certification process, specifying the minimum qualifications required to be approved as an intermediary lender. The requirements for certification must include submission by the applicant of:
(1) an intermediary relending program plan;
(2) a listing of all available collateral capable of being mortgaged, pledged, or otherwise encumbered by the applicant in favor of the department for any intermediary loans that may be made to the applicant upon certification; and
(3) any other information or documentation requested by the department.
NEW SECTION. Section 3. Review of certified intermediary loans. (1) The department shall require a certified intermediary lender to:
(a) pledge a sufficient amount of its collateral to the department as security for any loan given by the department to the certified intermediary lender; and
(b) assign to the department any collateral that the certified intermediary lender receives from a loan applicant before the department may advance the funds for that loan to the certified intermediary lender.
(2) (a) All loans to be made by a certified intermediary lender must be approved by the department prior to completion.
(b) Funds that the department has authorized for a certified intermediary lender may be drawn on by the certified intermediary lender only on an as-needed basis and must remain in the appropriate state investment fund until withdrawn.
Section 4. Section 17-6-510, MCA, is amended to read:
"17-6-510. Loan review committee -- conflict of interest -- servicing of loans. (1) The department shall establish a loan review committee to administer this part. The committee shall accept and review loan applications pursuant to rules adopted by the department. The committee shall recommend to the board the approval or disapproval of loans. A loan, other than to a certified intermediary lender, may not exceed $500,000.
(2) If a member of the committee has a financial interest in a business that submits a job investment loan application, then the application must be denied.
(3) The department shall contract for the servicing of loans."
NEW SECTION. Section 5. Codification instruction. [Sections 1 through 3] are intended to be codified as an integral part of Title 17, chapter 6, part 5, and the provisions of Title 17, chapter 6, part 5, apply to [sections 1 through 3].