(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 two-thirds 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 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 thirty-three 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 two-thirds 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%) 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 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.