California Boating Law

5174

TITLE 14

DEPARTMENT OF BOATING AND WATERWAYS

other charges used in estimating revenues, and evaluation of the sufficiency of revenues to cover annual costs on a year-by-year basis, including the amortization of the applied-for loan. (b) Upon request of the applicant, the department may issue a letter of intent, explaining the availability of State funds, the status of the loan application and other requirements necessary for the approval of the loan. NOTE: Authority cited: Sections 63.9(e) and 76.8, Harbors and Navigation Code. Reference: Sections 76.3, 76.4, 76.5 and 85.2, Harbors and Navigation Code. 5174. Priority. When considering applications, the department shall, in addition to priorities set forward in Sections 76 through 77.1 of the Harbors and Navigation Code, rank borrowers based upon the following; however, in no case shall the department make a loan to any recreational marina that restricts access or bars the public other than in ways that are lawful and consistent with general commercial business practices: (a) First priority shall be given to projects based upon issues of the health and safety of boaters using the facilities. (b) Next, priority will be given for completion of projects that are being phase-funded. (c) Next, priority shall be given to projects that are receiving significant capital investment funds from borrowers in addition to loan funds. (d) Next, priority shall be given based upon relative demand for facilities in the market area. Consideration shall be given to: (e) In the event that a priority between applications cannot be established by subsections (a) through (c), priority will be given to borrowers with the greatest ability to repay the loan. Evaluation of the borrower’s ability to repay shall be based on: (1) The department’s relative security position. (2) The loan-to-value (LTV) ratio. (3) The borrower’s audited financial statements for the three years immediately preceding the application, if available. i. Each of these statements shall consist of a balance sheet, an income statement, and a statement of changes in financial position, all of which shall have been prepared according to generally accepted accounting principles. ii. If the latest complete financial statement is more than six months old, an interim financial statement not older than sixty days shall be included. (4) Other information acceptable to the department, if financial state- ments are not available, which establishes a financial ability to repay the loan, such as: (1) Population size of the market area. (2) Similar facilities in the market area. (3) Boating activity in the market area.

250