00 SENATE BILL NO. 67 01 "An Act establishing the commercial charter fisheries revolving loan fund, the 02 mariculture revolving loan fund, and the Alaska microloan revolving loan fund and 03 relating to those funds and loans from those funds; and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05  * Section 1. AS 16.10 is amended by adding new sections to read: 06 Article 13. Commercial Charter Fisheries Revolving Loan Fund.  07 Sec. 16.10.801. Commercial charter fisheries revolving loan fund. (a) There 08 is created within the Department of Commerce, Community, and Economic 09 Development a revolving loan fund to be known as the commercial charter fisheries 10 revolving loan fund to carry out the purposes of AS 16.10.801 - 16.10.890. 11 (b) The commercial charter fisheries revolving loan fund consists of the 12 following: 13 (1) money appropriated to, transferred to, or received by gift, devise, 14 bequest, or donation to the fund; 01 (2) principal and interest payments or other income earned on loans or 02 investments of the fund; 03 (3) money chargeable to principal or interest that is collected through 04 liquidation by foreclosure or other process on loans made under AS 16.10.801 - 05 16.10.890. 06 (c) Money in the fund may be used by the legislature to make appropriations 07 for costs of administering AS 16.10.801 - 16.10.890. 08 Sec. 16.10.805. Powers and duties of the department. The department may 09 (1) make loans to eligible applicants under AS 16.10.801 - 16.10.890 10 (A) for the purchase of charter halibut permits; 11 (B) for the purchase or construction of a charter halibut fishing 12 vessel; 13 (C) to upgrade existing charter halibut fishing vessels and gear 14 for the purpose of improving engine fuel efficiency; 15 (D) to refinance debt obligations, made by other lenders more 16 than 12 months before receipt by the department of the loan application, 17 incurred by an applicant for the purchase of charter halibut fishing vessels or 18 gear if the applicant otherwise qualifies for a loan under AS 16.10.801 - 19 16.10.890; the department may collect a refinancing loan origination charge as 20 provided by regulation; 21 (2) receive, take, hold, and administer any appropriation, gift, grant, 22 bequest, devise, or donation of money for the fund; 23 (3) establish amortization plans for repayment of loans, including 24 extensions of the terms of loans; 25 (4) allow an assumption of a loan if 26 (A) the applicant meets the requirements established under this 27 section; and 28 (B) approval of the assumption would be consistent with the 29 purposes of this section; 30 (5) establish the rate of interest for loans consistent with law; 31 (6) charge and collect fees for services provided under AS 16.10.801 - 01 16.10.890; 02 (7) adopt regulations, under AS 44.62, necessary to carry out the 03 provisions of AS 16.10.801 - 16.10.890, including regulations to establish reasonable 04 fees for services provided; and 05 (8) designate agents and delegate powers as necessary to the agents. 06 Sec. 16.10.810. Eligibility. (a) For an applicant to be eligible for a loan under 07 AS 16.10.801 - 16.10.890, the applicant must be a resident of the state as determined 08 under (c) of this section and must 09 (1) qualify for the purchase of a charter halibut permit under applicable 10 law; 11 (2) qualify as a transferee for a charter halibut permit under applicable 12 law; 13 (3) purchase or construct a charter halibut fishing vessel; or 14 (4) upgrade an existing charter halibut fishing vessel or gear for the 15 purpose of improving engine fuel efficiency. 16 (b) In addition to the requirements set out in (a) of this section, the applicant 17 (1) must not be eligible for financing from other recognized 18 commercial lending institutions; or 19 (2) is able to obtain only a portion of the total loan request from a 20 recognized commercial lending institution. 21 (c) To meet the residency requirements of (a) of this section, the applicant 22 (1) must physically reside in this state and maintain a domicile in this 23 state during the 24 consecutive months before the date of application for the program; 24 and 25 (2) may not have 26 (A) declared or established residency in another state; or 27 (B) received residency or a benefit based on residency from 28 another state. 29 Sec. 16.10.815. Limitations on loans. (a) Except as provided in (b) of this 30 section, a loan under AS 16.10.801 - 16.10.890 31 (1) may not exceed $100,000; 01 (2) may not exceed a term of 15 years, except for extensions under 02 AS 16.10.805; 03 (3) must not bear interest exceeding the prime rate, as defined by 04 AS 44.88.599, plus two percentage points, but which may not be less than three 05 percent per year and not more than 10 1/2 percent per year; 06 (4) must be secured by a first priority lien on collateral acceptable to 07 the commissioner; and 08 (5) may not be made to a person who has a past due child support 09 obligation established by court order or by the child support services agency under 10 AS 25.27.160 - 25.27.220 at the time of application. 11 (b) The interest rate for loans for the improvement of engine fuel efficiency 12 must be two percentage points below the prime rate, as defined by AS 44.88.599, but 13 may not be less than three percent per year and not more than 10 1/2 percent per year. 14 (c) The total balances outstanding on loans made to a borrower under 15 AS 16.10.805 may not exceed $300,000. 16 Sec. 16.10.820. Default. If the borrower defaults upon a note, the department 17 shall notify the borrower of the default and the consequences of default by mailing a 18 notice to the borrower's most recent address provided to the department by the 19 borrower or obtained by the department. 20 Sec. 16.10.825. Special account established. (a) There is established as a 21 special account within the commercial charter fisheries revolving loan fund the 22 foreclosure expense account. 23 (b) The department may expend money credited to the foreclosure expense 24 account when necessary to protect the state's security interest in collateral on loans 25 granted under AS 16.10.815 or to defray expenses incurred during foreclosure 26 proceedings after a default by an obligor. 27 Sec. 16.10.830. Disposal of property acquired after default. The department 28 shall dispose of property acquired through default of a loan made under AS 16.10.801 29 - 16.10.890. Disposal must be made in a manner that serves the best interest of the 30 state, and may include the amortization of payments over a period of years. 31 Sec. 16.10.835. Waiver of confidentiality. The commissioner may release 01 information about the borrower's loan to any individual when release of the 02 information has been authorized by the borrower. 03 Sec. 16.10.890. Definitions. In AS 16.10.801 - 16.10.890 04 (1) "commissioner" means the commissioner of commerce, 05 community, and economic development; 06 (2) "department" means the Department of Commerce, Community, 07 and Economic Development. 08  * Sec. 2. AS 16.10 is amended by adding new sections to read: 09 Article 14. Mariculture Revolving Loan Fund.  10 Sec. 16.10.900. Mariculture revolving loan fund. (a) There is created within 11 the Department of Commerce, Community, and Economic Development a revolving 12 loan fund to be known as the mariculture revolving loan fund to carry out the purposes 13 of AS 16.10.900 - 16.10.945. 14 (b) The mariculture revolving loan fund consists of the following: 15 (1) money appropriated to, transferred to, or received by gift, devise, 16 bequest, or donation to the fund; 17 (2) principal and interest payments or other income earned on loans or 18 investments of the fund; 19 (3) money chargeable to principal or interest that is collected through 20 liquidation by foreclosure or other process on loans made under AS 16.10.901 - 21 16.10.990. 22 (c) Money in the fund may be used by the legislature to make appropriations 23 for costs of administering AS 16.10.900 - 16.10.945. 24 Sec. 16.10.905. Powers and duties of the department. The department may 25 (1) make loans to eligible applicants under AS 16.10.900 - 16.10.945 26 for the planning, construction, and operation of a mariculture business; 27 (2) receive, take, hold, and administer any appropriation, gift, grant, 28 bequest, devise, or donation of money for the fund; 29 (3) establish amortization plans for repayment of loans, including 30 extensions of the terms of loans; 31 (4) allow an assumption of a loan if 01 (A) the applicant meets the requirements established under this 02 section; and 03 (B) approval of the assumption would be consistent with the 04 purposes of this section; 05 (5) establish the rate of interest for loans consistent with law; 06 (6) charge and collect fees for services provided under AS 16.10.900 - 07 16.10.945; 08 (7) adopt regulations, under AS 44.62, necessary to carry out the 09 provisions of AS 16.10.900 - 16.10.945, including regulations to establish reasonable 10 fees for services provided; and 11 (8) designate agents and delegate powers as necessary to the agents. 12 Sec. 16.10.910. Eligibility. (a) For an applicant to be eligible for a loan under 13 AS 16.10.900 - 16.10.945, the applicant must 14 (1) be a resident of the state as determined under (c) of this section; 15 (2) have a permitted mariculture farm location in this state; and 16 (3) have experience or training in the mariculture industry. 17 (b) In addition to the requirements set out in (a) of this section, the applicant 18 (1) must not be eligible for financing from other recognized 19 commercial lending institutions; or 20 (2) is able to obtain only a portion of the total loan request from a 21 recognized commercial lending institution. 22 (c) To meet the residency requirements of (a) of this section, the applicant 23 (1) must physically reside in this state and maintain a domicile in this 24 state during the 24 consecutive months before the date of application for the program; 25 and 26 (2) may not have 27 (A) declared or established residency in another state; or 28 (B) received residency or a benefit based on residency from 29 another state. 30 Sec. 16.10.915. Limitations on loans. (a) Except as provided in (b) and (c) of 31 this section, a loan under AS 16.10.900 - 16.10.945 01 (1) may not exceed $100,000 per year; 02 (2) may not exceed a term of 20 years, except for extensions under 03 AS 16.10.905; 04 (3) must not bear interest exceeding the prime rate, as defined by 05 AS 44.88.599, plus one percentage point, but which may not be less than five percent 06 per year and not more than nine percent per year; 07 (4) must be secured by a first priority lien on collateral acceptable to 08 the department; and 09 (5) may not be made to a person who has a past due child support 10 obligation established by court order or by the child support services agency under 11 AS 25.27.160 - 25.27.220 at the time of application. 12 (b) Subsequent loans may be made to the borrower under AS 16.10.910 if the 13 total of the balances outstanding on the loans received by the borrower does not 14 exceed $300,000. 15 (c) A loan under AS 16.10.910 may not be made for the purchase of boats or 16 vessels. 17 Sec. 16.10.920. Repayment of principal and interest on loans. The 18 department may not require the repayment of principal on a loan made under 19 AS 16.10.910 for the initial period of the loan. Interest on the principal of a loan made 20 under AS 16.10.910 does not accrue during the initial period of the loan. In this 21 subsection, the "initial period of the loan" means a period of six years from the date 22 the loan is made. 23 Sec. 16.10.925. Default. If the borrower defaults upon a note, the department 24 shall notify the borrower of the default and the consequences of default by mailing a 25 notice to the borrower's most recent address provided to the department by the 26 borrower or obtained by the department. 27 Sec. 16.10.930. Special account established. (a) There is established as a 28 special account within the mariculture revolving loan fund the foreclosure expense 29 account. 30 (b) The department may expend money credited to the foreclosure expense 31 account when necessary to protect the state's security interest in collateral on loans 01 granted under AS 16.10.910 or to defray expenses incurred during foreclosure 02 proceedings after a default by an obligor. 03 Sec. 16.10.935. Disposal of property acquired after default. The department 04 shall dispose of property acquired through default of a loan made under AS 16.10.900 05 - 16.10.990. Disposal must be made in a manner that serves the best interest of the 06 state, and may include the amortization of payments over a period of years. 07 Sec. 16.10.940. Waiver of confidentiality. The commissioner may release 08 information about the borrower's loan to any individual when release of the 09 information has been authorized by the borrower. 10 Sec. 16.10.945. Definitions. In AS 16.10.900 - 16.10.945 11 (1) "commissioner" means the commissioner of commerce, 12 community, and economic development; 13 (2) "department" means the Department of Commerce, Community, 14 and Economic Development; 15 (3) "mariculture" means the farming of shellfish and aquatic plants as 16 defined in AS 16.40.199. 17  * Sec. 3. AS 44.33 is amended by adding new sections to read: 18 Article 15. Alaska Microloan Revolving Loan Fund.  19 Sec. 44.33.950. Alaska microloan revolving loan fund. (a) There is created 20 within the Department of Commerce, Community, and Economic Development a 21 revolving loan fund to be known as the Alaska microloan revolving loan fund to carry 22 out the purposes of AS 44.33.950 - 44.33.990. 23 (b) The Alaska microloan revolving loan fund consists of the following: 24 (1) money appropriated to, transferred to, or received by gift, devise, 25 bequest, or donation to the fund; 26 (2) principal and interest payments or other income earned on loans or 27 investments of the fund; 28 (3) money chargeable to principal or interest that is collected through 29 liquidation by foreclosure or other process on loans made under AS 44.33.950 - 30 44.33.990. 31 (c) Money in the fund may be used by the legislature to make appropriations 01 for costs of administering AS 44.33.950 - 44.33.990. 02 Sec. 44.33.955. Powers and duties of the department. The department may 03 (1) make loans to eligible applicants under AS 44.33.950 - 44.33.990 04 to be used for working capital, equipment, construction, or other commercial purposes 05 by a business located in the state; 06 (2) receive, take, hold, and administer any appropriation, gift, grant, 07 bequest, devise, or donation of money for the fund; 08 (3) establish amortization plans for repayment of loans, including 09 extensions of the terms of loans; 10 (4) allow an assumption of a loan if 11 (A) the applicant meets the requirements established under this 12 section; and 13 (B) approval of the assumption would be consistent with the 14 purposes of this section; 15 (5) establish the rate of interest for loans consistent with law; 16 (6) charge and collect fees for services provided under AS 44.33.950 - 17 44.33.990; and 18 (7) adopt regulations, under AS 44.62, necessary to carry out the 19 provisions of AS 44.33.950 - 44.33.990, including regulations to establish reasonable 20 fees for services provided; and 21 (8) designate agents and delegate powers as necessary to the agents. 22 Sec. 44.33.960. Eligibility. (a) For an applicant to be eligible for a loan under 23 AS 44.33.950 - 44.33.990, the applicant must 24 (1) be a resident of the state as determined under (b) of this section; 25 and 26 (2) provide a reasonable amount of money from other nonstate sources 27 for use on any project or enterprise for which money from a loan will be used.  28 (b) To meet the residency requirements of (a) of this section, the applicant 29 (1) must physically reside in this state and maintain a domicile in this 30 state during the 12 consecutive months before the date of application for the program; 31 and 01 (2) may not have 02 (A) declared or established residency in another state; or 03 (B) received residency or a benefit based on residency from 04 another state. 05 Sec. 44.33.965. Limitations on loans. (a) The department may use money 06 from the Alaska microloan revolving loan fund to make loans of up to $35,000 to a 07 person, or loans of up to $70,000 to two or more persons. 08 (b) A loan established under AS 44.33.950 - 44.33.990 09 (1) may not exceed a term of six years, except for extensions under 10 AS 44.33.955; 11 (2) must not bear interest exceeding the prime rate, as defined by 12 AS 44.88.599, plus one percentage point but which may not be less than six percent 13 per year and not more than eight percent per year; 14 (3) must be secured by collateral acceptable to the commissioner; and 15 (4) may not be made to a person who has a past due child support 16 obligation established by court order or by the child support services agency under 17 AS 25.27.160 - 25.27.220 at the time of application. 18 Sec. 44.33.970. Special account established. (a) There is established as a 19 special account within the Alaska microloan revolving loan fund the foreclosure 20 expense account. 21 (b) The department may expend money credited to the foreclosure expense 22 account when necessary to protect the state's security interest in collateral on loans 23 granted under AS 44.33.960 or to defray expenses incurred during foreclosure 24 proceedings after a default by an obligor. 25 Sec. 44.33.975. Default. If the borrower defaults upon a note, the department 26 shall notify the borrower of the default and the consequences of default by mailing a 27 notice to the borrower's most recent address provided to the department by the 28 borrower or obtained by the department. 29 Sec. 44.33.980. Disposal of property acquired after default. The department 30 shall dispose of property acquired through default of a loan made under AS 44.33.950 31 - 44.33.990. Disposal must be made in a manner that serves the best interest of the 01 state, and may include the amortization of payments over a period of years. 02 Sec. 44.33.990. Definitions. In AS AS 44.33.950 - 44.33.990 03 (1) "commissioner" means the commissioner of commerce, 04 community, and economic development; 05 (2) "department" means the Department of Commerce, Community, 06 and Economic Development. 07  * Sec. 4. The uncodified law of the State if Alaska is amended by adding a new section to 08 read: 09 TRANSITION: REGULATIONS. The Department of Commerce, Community, and 10 Economic Development may proceed to adopt regulations to implement this Act. The 11 regulations take effect under AS 44.62 (Administrative Procedure Act), but not before the 12 effective date of the law implemented by the regulation. 13  * Sec. 5. This Act takes effect immediately under AS 01.10.070(c).