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HB 121: "An Act establishing the commercial charter fisheries revolving loan fund, the mariculture revolving loan fund, and the Alaska microloan revolving loan fund and relating to those funds and loans from those funds; and providing for an effective date."

00                             HOUSE BILL NO. 121                                                                          
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).