Section 12.7 - Lease Financing(a) Loans to industrial development authorities. Pursuant to the Finance Code, § RSA 34.201(b)(2), a loan or extension of credit to an industrial development authority or similar public entity created to construct and lease a plant facility, including a health care facility, to an industrial occupant is considered a loan to the lessee, provided that: (1) the bank documents the basis for its reliance on the industrial occupant as the primary source of repayment before the loan is extended to the authority;(2) the authority's liability on the loan is limited solely to whatever interest it has in the particular facility;(3) the authority's interest is assigned to the bank as security for the loan or the industrial occupant issues a promissory note to the bank that provides a higher order of security than the assignment of a lease; and(4) the industrial occupant's lease rentals are assigned and paid directly to the bank.(b) Loans to or leases purchased from leasing companies. Pursuant to the Finance Code, § RSA 34.201(b)(2), a loan or extension of credit to a leasing company for the purpose of purchasing equipment for lease, or a lease purchased from a leasing company, is considered a loan to the lessee, provided that: (1) the bank documents the basis for its reliance on the lessee as the primary source of repayment before the loan is extended to, or lease is purchased from, the leasing company;(2) the loan is made, or lease is purchased, without recourse to the leasing company;(3) the bank receives a security interest in the equipment and, in the event of default, may proceed directly against the equipment and the lessee for any deficiency resulting from the sale of the equipment;(4) the leasing company assigns all of its rights under the lease to the bank;(5) the lessee's lease payments are assigned and paid to the bank directly by the lessee; and(6) the lease terms are subject to the same limitations that would apply to a state bank acting as a lessor under the Finance Code, § RSA 34.204.7 Tex. Admin. Code § 12.7
The provisions of this §12.7 adopted to be effective March 1, 1996, 21 TexReg 1383; amended to be effective May 10, 2012, 37 TexReg 3395