1-1     By:  Hunter (Senate Sponsor - Armbrister)             H.B. No. 3589
 1-2           (In the Senate - Received from the House April 23, 2001;
 1-3     April 24, 2001, read first time and referred to Committee on
 1-4     Business and Commerce; May 10, 2001, reported favorably by the
 1-5     following vote:  Yeas 6, Nays 0; May 10, 2001, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to the Texas Film Industry Development Loan Guarantee
 1-9     Program.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1.  Section 403.327, Government Code, is amended to
1-12     read as follows:
1-13           Sec. 403.327.  INDEMNITY REQUIREMENT.  For each film to be
1-14     produced with the proceeds from a loan approved to be guaranteed
1-15     under the program, the producer of the film shall provide an
1-16     indemnity against loss in an amount equal to the full amount of the
1-17     loan guarantee. The indemnity must be issued to the comptroller as
1-18     the beneficiary of the indemnity by:
1-19                 (1)  an insurance company, surety company, or financial
1-20     institution that [is]:
1-21                       (A)  is [(1)] licensed and authorized to do
1-22     business in this state; and
1-23                       (B)  is [(2)] approved by the comptroller; or
1-24                 (2)  an eligible surplus lines insurer that:
1-25                       (A)  meets the requirements of Article 1.14-2,
1-26     Insurance Code, and rules adopted by the commissioner under that
1-27     article; and
1-28                       (B)  is approved by the comptroller.
1-29           SECTION 2.  Section 403.329, Government Code, is amended to
1-30     read as follows:
1-31           Sec. 403.329.  ISSUANCE OF LOAN GUARANTEE.  (a)  The
1-32     comptroller may not approve the issuance of a loan guarantee under
1-33     the program unless:
1-34                 (1)  the loan for which the guarantee is sought meets
1-35     the qualifications of a Texas film production loan under Section
1-36     403.325;
1-37                 (2)  the comptroller approves the application for the
1-38     loan guarantee;
1-39                 (3)  the comptroller has received the application fee
1-40     required by Section 403.326(b); and
1-41                 (4)  the indemnity requirements of Section 403.327, the
1-42     surety bond requirements of Section 403.328, and any other bond or
1-43     insurance requirements prescribed under this subchapter or by
1-44     comptroller rule have been satisfied.
1-45           (b)  The comptroller may require the payment of a guarantee
1-46     fee for approval of the issuance of a loan guarantee. The
1-47     comptroller may set the fee in an amount sufficient to fund the
1-48     administration of the program.
1-49           SECTION 3.  Section 403.332, Government Code, is amended by
1-50     adding Subsections (c) and (d) to read as follows:
1-51           (c)  Subject to the limit established under Subsection (a),
1-52     the comptroller may approve loan guarantees in an amount that
1-53     exceeds the amount available in the Texas film industry
1-54     administrative fund established under Section 403.323.  Loan
1-55     guarantees approved by the comptroller may not exceed the
1-56     guarantee-to-reserve ratio established by the comptroller under
1-57     Subsection (d).
1-58           (d)  The comptroller by rule may adopt a guarantee-to-reserve
1-59     ratio that determines the amount of loan guarantees that may be
1-60     made that exceed the amount available in the fund.  The ratio of
1-61     guarantees to the amount of money available in the fund may not
1-62     exceed five to one.  The comptroller shall review the
1-63     guarantee-to-reserve ratio annually and adjust the ratio as
1-64     appropriate, considering the payment experience of the loans.
 2-1           SECTION 4.  This Act takes effect September 1, 2001.
 2-2                                  * * * * *