By Hunter                                             H.B. No. 3589
         Line and page numbers may not match official copy.
         Bill not drafted by TLC or Senate E&E.
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the Texas Film Industry Development Loan Guarantee
 1-3     program.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Section 403.327, Government Code, is amended to
 1-6     read as follows:
 1-7           For each film to be produced with the proceeds from a loan
 1-8     approved to be guaranteed under the program, the producer of the
 1-9     film shall provide an indemnity against loss in an amount equal to
1-10     the full amount of the loan guarantee.  The indemnity must be
1-11     issued to the comptroller as the beneficiary of the indemnity by an
1-12     insurance company, surety company, surplus lines insurer,  or
1-13     financial institution that [is]:
1-14                 (1)  is licensed and authorized to do business in this
1-15     state[;] and is approved by the comptroller; or
1-16                 (2)  for surplus lines insurers, meets the requirements
1-17     of Article 1.14-2, Insurance Code, and rules adopted by the State
1-18     Board of Insurance under that article, and is approved by the
1-19     comptroller.
1-20           SECTION 2. Section 403.329, Government Code, is amended to
1-21     read as follows:
1-22           (a)  The comptroller may not approve the issuance of a loan
1-23     guarantee under the program unless:
 2-1                 (1)  the loan for which the guarantee is sought meets
 2-2     the qualifications of a Texas film production loan under Section
 2-3     403.325;
 2-4                 (2)  the comptroller approves the application for the
 2-5     loan guarantee;
 2-6                 (3)  the comptroller has received the application fee
 2-7     required by Section 403.326(b); and
 2-8                 (4)  the indemnity requirements of Section 403.327, the
 2-9     surety bond requirements of Section 403.328, and any other bond or
2-10     insurance requirements prescribed under this subchapter or by
2-11     comptroller rule have been satisfied.
2-12           (b)  The comptroller may provide that a guarantee fee will be
2-13     payable as a condition of comptroller approval of the issuance of a
2-14     loan guarantee.  The comptroller may set the guarantee fee in an
2-15     amount sufficient to fund the administration of this program.
2-16           SECTION 3. Section 403.332, Government Code, is amended by
2-17     adding new Subsections (c) and (d) to read as follows:
2-18           (c)  Subject to the limitation specified in subsection (a),
2-19     the comptroller may approve guarantees in an amount that exceeds
2-20     the amount available in the fund established pursuant to Section
2-21     403.323.  Loan guarantees may not exceed the guarantee-to-reserve
2-22     ratio established by the comptroller under Subsection (d).
2-23           (d)  The comptroller by rule may adopt a guarantee-to-reserve
2-24     ratio that determines the amount of loan guarantees that may be
2-25     made that exceed the amount available in the fund.  The ratio of
2-26     guarantees to the amount of money available in the fund may not
 3-1     exceed five to one.  The comptroller shall review the
 3-2     guarantee-to-reserve ratio annually and adjust the ratio as
 3-3     appropriate, considering the payment experience of the loans.
 3-4           SECTION 4. EFFECTIVE DATE. This Act takes effect September 1,
 3-5     2001.