Oklahoma § 74-857 - Loans to industrial development agencies - Conditions

§ 74-857. Loans to industrial development agencies - Conditions

(1) When it has been determined by the Authority, upon

application of an industrial development agency and hearing thereon

in the manner hereinafter provided, that the establishment of a

particular industrial development project referred to in such

application has accomplished or will accomplish the public purposes

of this act, the Authority may contract to loan such industrial

development agency an amount not in excess of sixty-six and twothirds percent (66 2/3%) of the cost or the estimated cost of such

industrial development project where the loan is secured by a first

mortgage on the industrial development project, or not in excess of

thirty-three and one-third percent (33 1/3%) of the cost or

Oklahoma Statutes - Title 74. State Government

estimated cost of such industrial development project where the loan

is secured by a second mortgage on the industrial development

project, as established or to be established, subject however to the

following conditions:

(A) In case of industrial development projects to be

established:

1. the Authority shall first have determined that the

industrial development agency holds funds which together with the

commitment in paragraph 2 of this subsection constitute an amount

equal to, or property of a value equal to, not less than thirtythree and one-third percent (33 1/3%) of the estimated cost of

establishing the industrial development project where the

Authority's loan will be secured by a first mortgage on the

industrial development project, or not less than sixty-six and twothirds percent (66 2/3%) of the estimated cost of establishing the

industrial development project where the Authority's loan will be

secured by a second mortgage on the industrial development project,

which funds or property are available for and shall be applied to

the establishment of such project, and

2. the Authority shall also have determined that the industrial

development agency has obtained from other independent and

responsible sources, such as banks and insurance companies or

otherwise, a firm commitment for all other funds, over and above the

loan of the Authority and such funds or property as the industrial

development agency may hold, necessary for payment of all the

estimated cost of establishing the industrial development project,

and that the sum of all these funds is adequate to insure completion

and operation of the plant or facility, or that the sum of all these

funds, together with the machinery and equipment to be provided by

the responsible tenant or responsible buyer, is adequate to insure

completion and operation of the plant or facility. Provided,

however, that the participation required of the industrial

development agency referred to in paragraph 1 of this subsection,

may in the discretion of the Authority be reduced to the extent that

funds from independent and responsible sources under firm commitment

shall, together with the participation of the Authority, and the

participation of the industrialdevelopment agency, if any,

constitute one hundred percent (100%) of the cost of establishing an

industrial development project, as defined herein.

(B) In the case of industrial development projects established

without initial Authority loan participation:

1. the Authority shall first have determined that the

industrial development agency has expended funds which, together

with the commitment in paragraph 2 of this subsection, constitute an

amount equal to, or has applied property which, together with the

commitment in paragraph 2 of this subsection, constitutes a value

equal to, not less than sixty-six and two-thirds percent (66 2/3%)

Oklahoma Statutes - Title 74. State Government

of the cost of establishing the industrial development project where

the Authority's loan will be secured by a first mortgage lien on the

industrial development project, or not less than thirty-three and

one-third percent (33 1/3%) where the Authority's loan will be

secured by a second mortgage lien on the industrial development

project, and

2. the Authority shall also have determined that the industrial

development agency obtained from other independent and responsible

sources, such as banks and insurance companies or otherwise, other

funds necessary for payment of all the cost of establishing the

industrial development project, and that the industrial development

agency participation and these funds have been adequate to insure

completion and operation of the plant or facility, or that these

funds, together with the machinery and equipment provided by the

responsible tenant or responsible buyer, have been adequate to

insure completion and operation of the plant of facility. Provided,

however, that the proceeds of any loan made by the Authority to the

industrial development agency pursuant to this subsection (B) shall

be used only for the establishment of additional industrial

development projects in furtherance of the public purposes of this

act; and provided further, that the participation required of the

industrial development agency referred to in paragraph 1 of this

subsection, may in the discretion of the Authority be reduced to the

extent that funds from independent and responsible sources under

firm commitment together with the participation of the industrial

development agency, constitute sufficient funds to establish the

industrial development project, as defined herein.

3. Any such loan of the Authority shall be for such period of

time and shall bear interest at such rate as shall be determined by

the Authority and shall be secured by mortgage on the industrial

development project for which such loan was made, such mortgage to

be second and subordinate only to the mortgage securing the first

lien obligation issued to secure the commitment of funds from the

aforesaid independent and responsible sources and used in the

financing of the industrial development project.

4. Monies so loaned by the Authority to industrial development

agencies shall be withdrawn from the Industrial Development Fund and

paid over to the industrial development agency in such manner as

shall be provided and prescribed by the rules and regulations of the

Authority.

5. All payments of interest on said loans and the principal

thereof shall be deposited by the Authority without delay in the

Industrial Development Fund.

6. Loans by the Authority to an industrial development agency

for an industrial development project shall be made only in the

manner and to the extent as in this section provided, except,

however, in those instances wherein an agency of the federal

Oklahoma Statutes - Title 74. State Government

government participates in the financing of an industrial

development project by loan or grant, or otherwise, of federal

funds. When any federal agency does so participate, the Authority

may adjust the required ratios of financial participation by the

industrial development agency, the source of independent funds, and

the Authority; in such manner as to insure the maximum benefit

available to the industrial development agency, the Authority, or

both, by the participation of the federal agency; provided, however,

that no such adjustment of such ratios shall cause the Authority to

grant a loan to the industrial development agency in excess of

sixty-six and two-thirds percent (66 2/3%) of the cost or estimated

cost of the industrial development project where such loan is

secured by a first mortgage on the industrial development project,

or thirty-three and one-third percent (33 1/3%) of the cost or

estimated cost of the industrial development project, where such

loan is secured by a second mortgage on the industrial development

project.

7. Where any federal agency participating in the financing of

any industrial development project is not permitted to take as

security for such participation a mortgage the lien of which is

junior to the mortgage of the Authority, the Authority shall in such

instances be hereby authorized to take as security for its loan to

the industrial development agency a mortgage junior in lien to that

of the federal agency.

Amended by Laws 1987, c. 9, § 3, emerg. eff. March 31, 1987.