Office of House Bill AnalysisH.B. 3589
By: Hunter
State, Federal & International Relations


In 1999, the legislature established the Texas Film Industry Development
Loan Guarantee Program and the Texas Film Industry Administrative Fund to
assist film makers in borrowing money to make films.  The application for a
loan guarantee requires a film producer to provide to the comptroller an
indemnity against loss that equals the amount guaranteed by the state.
Prior to the 77th Legislature, the indemnity had to be issued by a
Texas-licensed insurance company, surety company, or financial institution.
House Bill 3589 adds a surplus lines insurance company to this list and
sets forth provisions regarding a loan guarantee. 


It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the comptroller of public accounts in
SECTION 3 (Section 403.332, Government Code) of this bill. 


House Bill 3589 amends the Government Code to add a surplus lines insurer
to the entities that are authorized to issue an indemnity against loss
(indemnity) to a film producer who is producing the film with the proceeds
from a loan guaranteed under the loan guarantee indemnity program
(program).  The bill provides that a surplus lines insurer must meet the
requirements and rules for surplus lines insurance adopted by the
commissioner of insurance.   

The bill authorizes the comptroller to require the payment of a guarantee
fee for approval of the  issuance of a loan guarantee and to set the
guarantee fee in an amount sufficient to fund the administration of the
program.  The bill authorizes the comptroller by rule to adopt a
guarantee-to-reserve ratio that determines the amount of loan guarantees
that may be made to exceed the amount available in the Texas Film Industry
Administrative Fund (fund).  The bill prohibits the ratio of guarantees to
the amount of money available in the fund from exceeding five to one, and
requires the comptroller to review and adjust the guarantee-toreserve ratio


September 1, 2001.