California Boating Law

5175

TITLE 14

DEPARTMENT OF BOATING AND WATERWAYS

(c) Real estate or stationary machinery or equipment pledged as a significant portion of collateral for repayment of a guaranteed loan shall be located within the State of California. Real estate pledged as collateral shall not include land that has been used as a solid waste disposal site. Any appraisal of property shall be conducted by a licensed appraiser acceptable to the borrower and the department. (d) The borrower shall obtain and maintain, throughout the duration of the loan, fire and extended coverage insurance in an amount equal to 100 percent of the current replacement cost of all improvements which are part of the collateral, with the department named as additional insured. (e) The borrower will obtain insurance to cover liability arising from design, planning, construction, maintenance or operation of the project, with the department named as additional insured, in the following minimum amounts: (1) Bodily injury $300,000 each person, $1,000,000 each occurrence. (2) Property and product damage $500,000 each occurrence, $1,000,000 each aggregate. (f) The loan shall become due and payable in full upon transfer of the marina, unless such transfer is: (1) By reason of death of the borrower, and the marina is transferred to the borrower’s heirs. (2) Transfer is to another business entity controlled by the borrower, provided that the transaction does not result in a material change in control or ownership of the recreational marina and collateral associated with the loan. (g) The loan shall not be subordinated to any future loans obtained by a private marina owner except in those cases involving loans acquired for refinancing previous senior loans. (h) A provision that the department, the Department of General Services, the Bureau of State Audits, or their designated representative shall have the right to review and copy any records for possible audit for a minimum of three years after final payment, unless a longer period of records retention is stipulated. (i) A provision that the borrower agrees to allow the auditor(s) access to such records during normal business hours and to allow interviews of any employees who might reasonably have information related to such records. NOTE: Authority cited: Sections 63.9(e) and 76.8, Harbors and Navigation Code. Reference: Sections 76.3, 76.6 and 85.2, Harbors and Navigation Code; and Department of General Services (DGS), Standard Agreement Language, as found in GTC 699 (and as may be subsequently amended by DGS).

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