California Boating Law

TITLE 14

5175

DEPARTMENT OF BOATING AND WATERWAYS

i. Federal income tax returns, filed with the application, and ii. Credit reports from credit reporting agencies. (5) An appraisal report showing the current market value of real and personal property which is suitable as collateral. (6) The type and liquidity of the collateral. (f) In the event that a priority between applications cannot be established by subsections (a) through (d), priority will be given to those applications with the smallest dollar value, in order to allow the maximum number of projects to be made within the limits of the Recreational Marina Loan Program. 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. 5175. Loan Terms and Conditions. Loan Terms and conditions, in addition to those specified in Sections 76 through 77.1 of the Harbors and Navigation Code, shall also include the following provisions: (a) The borrower shall establish and capitalize a reserve fund in an amount and under terms and conditions specified by the department. (1) The reserve fund shall be an interest-bearing account. (2) In order to withdraw funds from the reserve fund, the signature of the director, or his or her designee, shall be required. (3) All funds remaining in the reserve fund account shall be returned to the borrower upon full performance of the loan contract. However, unless and until all reserve funds, including accumulated interest, are first com- mitted to improvements at the marina, the borrower may not apply for additional department funding for any project within the marina for a period of five years beginning on the last date any reserve funds are returned to the borrower. (b) The loan shall be secured by collateral equal to or greater than 110 percent of the loan amount, such as, but not limited to, a mortgage or security interest in real estate, and buildings or personal property of the borrower. These items may only be subject to encumbrances that the department may approve, such as, assignment or pledges of leases, and personal or corporate guarantees. Only the unencumbered equity portion of the property accepted as collateral shall be considered as collateral. Personal guarantees of the principals shall be required, unless reasons satisfactory to the department are presented that justify not requiring such guarantees. The value of the collateral shall be subject to reappraisal as requested by the department from time to time at its discretion, and if, as a result of such reappraisal, it is determined that the value of the collateral has dropped below 110 percent of the then-outstanding loan amount, the borrower shall provide additional collateral as security as required by the department.

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