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CSHB 121(FSH): "An Act relating to loans made to commercial fishermen under the Commercial Fishing Loan Act for product quality improvements and energy efficiency upgrades; 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                       CS FOR HOUSE BILL NO. 121(FSH)                                                                    
01 "An Act relating to loans made to commercial fishermen under the Commercial Fishing                                     
02 Loan Act for product quality improvements and energy efficiency upgrades;                                               
03 establishing the commercial charter fisheries revolving loan fund, the mariculture                                      
04 revolving loan fund, and the Alaska microloan revolving loan fund and relating to those                                 
05 funds and loans from those funds; and providing for an effective date."                                                 
06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
07    * Section 1. AS 16.10.320 is amended by adding a new subsection to read:                                           
08            (l)  For a new loan under AS 16.10.300 - 16.10.370, made on or after the                                     
09       effective date of this Act, the department may provide a reduction of the interest rate                           
10       of not more than two percent if at least 50 percent of the loan proceeds are used by the                          
11       borrower for product quality improvements or energy efficiency upgrades if the                                    
12       improvements or upgrades use products manufactured or produced in the state. When                                 
13       the department offers a reduction under this subsection, the department shall provide                             
01       the reduction to all loan applicants who meet the criterion described in this subsection.                         
02       In this subsection, "manufactured or produced" means processing, developing, or                                   
03       making an item into a new item with a distinct character and use.                                                 
04    * Sec. 2. AS 16.10 is amended by adding new sections to read:                                                      
05           Article 13. Commercial Charter Fisheries Revolving Loan Fund.                                               
06            Sec. 16.10.801. Commercial charter fisheries revolving loan fund. (a) The                                  
07       commercial charter fisheries revolving loan fund is created in the Department of                                  
08       Commerce, Community, and Economic Development to carry out the purposes of                                        
09       AS 16.10.801 - 16.10.890.                                                                                         
10            (b)  The commercial charter fisheries revolving loan fund consists of the                                    
11       following:                                                                                                        
12                 (1)  money appropriated to, transferred to, or received by gift, grant,                                 
13       devise, bequest, or donation to the fund;                                                                         
14                 (2)  principal and interest payments or other income earned on loans or                                 
15       investments of the fund;                                                                                          
16                 (3)  money chargeable to principal or interest that is collected through                                
17       liquidation by foreclosure or other process on loans made under AS 16.10.801 -                                    
18       16.10.890.                                                                                                        
19            (c)  Money in the fund may be used by the legislature to make appropriations                                 
20       for costs of administering AS 16.10.801 - 16.10.890.                                                              
21            Sec. 16.10.805. Powers and duties of the department. The department may                                    
22                 (1)  make loans to eligible applicants under AS 16.10.801 - 16.10.890                                   
23                      (A)  for the purchase of charter halibut permits;                                                  
24                      (B)  for the purchase or construction of a charter halibut fishing                                 
25            vessel;                                                                                                      
26                      (C)  to upgrade existing charter halibut fishing vessels and gear                                  
27            for the purpose of improving engine fuel efficiency;                                                         
28                      (D)  to refinance debt obligations made by other lenders more                                      
29            than 12 months before the department received the loan application and                                       
30            incurred by an applicant for the purchase of charter halibut fishing vessels or                              
31            gear if the applicant otherwise qualifies for a loan under AS 16.10.801 -                                    
01            16.10.890; the department may collect a refinancing loan origination charge as                               
02            provided by regulation;                                                                                      
03                 (2)  receive, take, hold, and administer any appropriation, transfer, gift,                             
04       grant, bequest, devise, or donation of money for the fund;                                                        
05                 (3)  establish amortization plans for repayment of loans, including                                     
06       extensions of the terms of loans;                                                                                 
07                 (4)  allow an assumption of a loan if                                                                   
08                      (A)  the applicant meets the requirements established under this                                   
09            section; and                                                                                                 
10                      (B)  approval of the assumption would be consistent with the                                       
11            purposes of AS 16.10.801 - 16.10.890;                                                                        
12                 (5)  establish the rate of interest for loans consistent with law;                                      
13                 (6)  charge and collect fees for services provided under AS 16.10.801 -                                 
14       16.10.890;                                                                                                        
15                 (7)  adopt regulations under AS 44.62 necessary to carry out the                                        
16       provisions of AS 16.10.801 - 16.10.890, including regulations to establish reasonable                             
17       fees for services provided; and                                                                                   
18                 (8)  designate agents and delegate powers as necessary to the agents.                                   
19            Sec. 16.10.810. Eligibility. (a) For an applicant to be eligible for a loan under                          
20       AS 16.10.801 - 16.10.890, the applicant shall be a resident of the state, as determined                           
21       under (c) of this section, and shall                                                                              
22                 (1)  qualify for the purchase of a charter halibut permit under applicable                              
23       law;                                                                                                              
24                 (2)  qualify as a transferee for a charter halibut permit under applicable                              
25       law;                                                                                                              
26                 (3)  purchase or construct a charter halibut fishing vessel; or                                         
27                 (4)  upgrade an existing charter halibut fishing vessel or gear for the                                 
28       purpose of improving engine fuel efficiency.                                                                      
29            (b)  In addition to the requirements set out in (a) of this section, the applicant                           
30                 (1)  may not be eligible for financing from other recognized                                            
31       commercial lending institutions; or                                                                               
01                 (2)  shall be able to obtain only a portion of the total loan request from                              
02       a recognized commercial lending institution.                                                                      
03            (c)  To meet the residency requirements of (a) of this section, the applicant                                
04                 (1)  shall physically reside in this state and maintain a domicile in this                              
05       state during the 24 consecutive months preceding the date of application for the                                  
06       program; and                                                                                                      
07                 (2)  may not have                                                                                       
08                      (A)  declared or established residency in another state; or                                        
09                      (B)  received residency or a benefit based on residency from                                       
10            another state.                                                                                               
11            Sec. 16.10.815. Limitations on loans. (a) Except as provided in (b) of this                                
12       section, a loan under AS 16.10.801 - 16.10.890                                                                    
13                 (1)  may not exceed $100,000 a year;                                                                    
14                 (2)  may not exceed a term of 15 years, except for extensions under                                     
15       AS 16.10.805;                                                                                                     
16                 (3)  may not bear interest at a rate greater than the prime rate, as                                    
17       defined in AS 44.88.599, plus two percentage points, but which may not be less than                               
18       three percent per year and not more than 10 1/2 percent a year;                                                   
19                 (4)  must be secured by a first priority lien on collateral acceptable to                               
20       the commissioner; and                                                                                             
21                 (5)  may not be made to a person who has a past due child support                                       
22       obligation established by court order or by the child support services agency under                               
23       AS 25.27.160 - 25.27.220 at the time of application.                                                              
24            (b)  The interest rate for loans for the improvement of engine fuel efficiency                               
25       must be two percentage points below the prime rate, as defined in AS 44.88.599, but                               
26       may not be less than three percent a year and not more than 10 1/2 percent a year.                                
27            (c)  The total balances outstanding on loans made to a borrower under                                        
28       AS 16.10.805 may not exceed $300,000.                                                                             
29            (d)  After the initial interest rate is set under (a) or (b) of this section for a loan                      
30       made under AS 16.10.801 - 16.10.890, the department may provide a reduction of the                                
31       interest rate of not more than two percent if at least 50 percent of the loan proceeds are                        
01       used by the borrower for engine fuel efficiency improvements if the upgrades use                                  
02       products manufactured or produced in the state. When the department offers a                                      
03       reduction under this subsection, the department shall provide the reduction to all loan                           
04       applicants who meet the criterion described in this subsection. In this subsection,                               
05       "manufactured or produced" means processing, developing, or making an item into a                                 
06       new item with a distinct character and use.                                                                       
07            Sec. 16.10.820. Default. If the borrower defaults on a note, the department                                
08       shall notify the borrower of the default and the consequences of default by mailing a                             
09       notice to the borrower's most recent address provided to the department by the                                    
10       borrower or obtained by the department.                                                                           
11            Sec. 16.10.825. Special account established. (a) The foreclosure expense                                   
12       account is established as a special account within the commercial charter fisheries                               
13       revolving loan fund.                                                                                              
14            (b)  The department may expend money credited to the foreclosure expense                                     
15       account when necessary to protect the state's security interest in collateral on loans                            
16       granted under AS 16.10.815 or to defray expenses incurred during foreclosure                                      
17       proceedings after an obligor defaults.                                                                            
18            Sec. 16.10.830. Disposal of property acquired after default. The department                                
19       shall dispose of property acquired through default of a loan made under AS 16.10.801                              
20       - 16.10.890. Disposal must be made in a manner that serves the best interest of the                               
21       state and may include the amortization of payments over a period of years.                                        
22            Sec. 16.10.835. Waiver of confidentiality. The commissioner may release                                    
23       information about the borrower's loan to any individual if release of the information                             
24       has been authorized by the borrower.                                                                              
25            Sec. 16.10.890. Definitions. In AS 16.10.801 - 16.10.890,                                                  
26                 (1)  "commissioner" means the commissioner of commerce,                                                 
27       community, and economic development;                                                                              
28                 (2)  "department" means the Department of Commerce, Community,                                          
29       and Economic Development.                                                                                         
30                 Article 14. Mariculture Revolving Loan Fund.                                                          
31            Sec. 16.10.900. Mariculture revolving loan fund. (a) The mariculture                                       
01       revolving loan fund is created within the Department of Commerce, Community, and                                  
02       Economic Development to carry out the purposes of AS 16.10.900 - 16.10.945.                                       
03            (b)  The mariculture revolving loan fund consists of the following:                                          
04                 (1)  money appropriated to, transferred to, or received by gift, grant,                                 
05       devise, bequest, or donation to the fund;                                                                         
06                 (2)  principal and interest payments or other income earned on loans or                                 
07       investments of the fund; and                                                                                      
08                 (3)  money chargeable to principal or interest that is collected through                                
09       liquidation by foreclosure or other process on loans made under AS 16.10.900 -                                    
10       16.10.945.                                                                                                        
11            (c)  Money in the fund may be used by the legislature to make appropriations                                 
12       for costs of administering AS 16.10.900 - 16.10.945.                                                              
13            Sec. 16.10.905. Powers and duties of the department. The department may                                    
14                 (1)  make loans to eligible applicants under AS 16.10.900 - 16.10.945                                   
15       for the planning, construction, and operation of a mariculture business;                                          
16                 (2)  receive, take, hold, and administer any appropriation, transfer, gift,                             
17       grant, bequest, devise, or donation of money for the fund;                                                        
18                 (3)  establish amortization plans for repayment of loans, including                                     
19       extensions of the terms of loans;                                                                                 
20                 (4)  allow an assumption of a loan if                                                                   
21                      (A)  the applicant meets the requirements established under this                                   
22            section; and                                                                                                 
23                      (B)  approval of the assumption would be consistent with the                                       
24            purposes of AS 16.10.900 - 16.10.945;                                                                        
25                 (5)  establish the rate of interest for loans consistent with law;                                      
26                 (6)  charge and collect fees for services provided under AS 16.10.900 -                                 
27       16.10.945;                                                                                                        
28                 (7)  adopt regulations under AS 44.62 necessary to carry out the                                        
29       provisions of AS 16.10.900 - 16.10.945, including regulations to establish reasonable                             
30       fees for services provided; and                                                                                   
31                 (8)  designate agents and delegate powers as necessary to the agents.                                   
01            Sec. 16.10.910. Eligibility. (a) For an applicant to be eligible for a loan under                          
02       AS 16.10.900 - 16.10.945, the applicant shall                                                                     
03                 (1)  be a resident of the state, as determined under (c) of this section;                               
04                 (2)  have a permitted mariculture farm location in this state; and                                      
05                 (3)  have experience or training in the mariculture industry.                                           
06            (b)  In addition to the requirements set out in (a) of this section, the applicant                           
07                 (1)  may not be eligible for financing from other recognized                                            
08       commercial lending institutions; or                                                                               
09                 (2)  shall be able to obtain only a portion of the total loan request from                              
10       a recognized commercial lending institution.                                                                      
11            (c)  To meet the residency requirements of (a) of this section, the applicant                                
12                 (1)  shall physically reside in this state and maintain a domicile in this                              
13       state during the 24 consecutive months preceding the date of application for the                                  
14       program; and                                                                                                      
15                 (2)  may not have                                                                                       
16                      (A)  declared or established residency in another state; or                                        
17                      (B)  received residency or a benefit based on residency from                                       
18            another state.                                                                                               
19            Sec. 16.10.915. Limitations on loans. (a) Except as provided in (b) and (c) of                             
20       this section, a loan under AS 16.10.900 - 16.10.945                                                               
21                 (1)  may not exceed $100,000 a year;                                                                    
22                 (2)  may not exceed a term of 20 years, except for extensions under                                     
23       AS 16.10.905;                                                                                                     
24                 (3)  may not bear interest at a rate greater than the prime rate, as                                    
25       defined in AS 44.88.599, plus one percentage point, but which may not be less than                                
26       five percent a year and not more than nine percent a year;                                                        
27                 (4)  must be secured by a first priority lien on collateral acceptable to                               
28       the department; and                                                                                               
29                 (5)  may not be made to a person who has a past due child support                                       
30       obligation established by court order or by the child support services agency under                               
31       AS 25.27.160 - 25.27.220 at the time of application.                                                              
01            (b)  Subsequent loans may be made to the borrower under AS 16.10.910 if the                                  
02       total of the balances outstanding on the loans received by the borrower does not                                  
03       exceed $300,000.                                                                                                  
04            (c)  A loan under AS 16.10.910 may be made for the purchase of boats or                                      
05       vessels determined to be integral to the operation of the farm.                                                   
06            (d)  For a loan made under AS 16.10.900 - 16.10.945, the department may                                      
07       provide a reduction of the interest rate of not more than two percent if at least 50                              
08       percent of the loan proceeds are used by the borrower for purchasing products                                     
09       manufactured or produced in the state. When the department offers a reduction under                               
10       this subsection, the department shall provide the reduction to all loan applicants who                            
11       meet the criterion described in this subsection. In this subsection, "manufactured or                             
12       produced" means processing, developing, or making an item into a new item with a                                  
13       distinct character and use.                                                                                       
14            Sec. 16.10.920. Repayment of principal of and interest on loans. The                                       
15       department may not require the repayment of principal and interest on a loan made                                 
16       under AS 16.10.910 during the first six years of the loan. Interest on the principal of a                         
17       loan made under AS 16.10.910 may be deferred for a period of not more than the first                              
18       six years of the loan.                                                                                            
19            Sec. 16.10.925. Default. If the borrower defaults on a note, the department                                
20       shall notify the borrower of the default and the consequences of default by mailing a                             
21       notice to the borrower's most recent address provided to the department by the                                    
22       borrower or obtained by the department.                                                                           
23            Sec. 16.10.930. Special account established. (a) The foreclosure expense                                   
24       account is established as a special account in the mariculture revolving loan fund.                               
25            (b)  The department may expend money credited to the foreclosure expense                                     
26       account when necessary to protect the state's security interest in collateral on loans                            
27       granted under AS 16.10.910 or to defray expenses incurred during foreclosure                                      
28       proceedings after an obligor defaults.                                                                            
29            Sec. 16.10.935. Disposal of property acquired after default. The department                                
30       shall dispose of property acquired through default of a loan made under AS 16.10.900                              
31       - 16.10.945. 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. 16.10.940. Waiver of confidentiality. The commissioner may release                                    
03       information about the borrower's loan to any individual if release of the information                             
04       has been authorized by the borrower.                                                                              
05            Sec. 16.10.945. Definitions. In AS 16.10.900 - 16.10.945,                                                  
06                 (1)  "commissioner" means the commissioner of commerce,                                                 
07       community, and economic development;                                                                              
08                 (2)  "department" means the Department of Commerce, Community,                                          
09       and Economic Development;                                                                                         
10                 (3)  "mariculture" means the farming of shellfish and aquatic plants as                                 
11       defined in AS 16.40.199.                                                                                          
12    * Sec. 3. AS 44.33 is amended by adding new sections to read:                                                      
13               Article 15. Alaska Microloan Revolving Loan Fund.                                                       
14            Sec. 44.33.950. Alaska microloan revolving loan fund. (a) The Alaska                                       
15       microloan revolving loan fund is created in the Department of Commerce,                                           
16       Community, and Economic Development to carry out the purposes of AS 44.33.950 -                                   
17       44.33.990.                                                                                                        
18            (b)  The Alaska microloan revolving loan fund consists of the following:                                     
19                 (1)  money appropriated to, transferred to, or received by gift, grant,                                 
20       devise, bequest, or donation to the fund;                                                                         
21                 (2)  principal and interest payments or other income earned on loans or                                 
22       investments of the fund;                                                                                          
23                 (3)  money chargeable to principal or interest that is collected through                                
24       liquidation by foreclosure or other process on loans made under AS 44.33.950 -                                    
25       44.33.990.                                                                                                        
26            (c)  Money in the fund may be used by the legislature to make appropriations                                 
27       for costs of administering AS 44.33.950 - 44.33.990.                                                              
28            Sec. 44.33.955. Powers and duties of the department. The department may                                    
29                 (1)  make loans to eligible applicants under AS 44.33.950 - 44.33.990                                   
30       to be used for working capital, equipment, construction, or other commercial purposes                             
31       by a business located in the state;                                                                               
01                 (2)  receive, take, hold, and administer any appropriation, transfer, gift,                             
02       grant, bequest, devise, or donation of money for the fund;                                                        
03                 (3)  establish amortization plans for repayment of loans, including                                     
04       extensions of the terms of loans;                                                                                 
05                 (4)  allow an assumption of a loan if                                                                   
06                      (A)  the applicant meets the requirements established under this                                   
07            section; and                                                                                                 
08                      (B)  approval of the assumption would be consistent with the                                       
09            purposes of AS 44.33.950 - 44.33.990;                                                                        
10                 (5)  establish the rate of interest for loans consistent with law;                                      
11                 (6)  charge and collect fees for services provided under AS 44.33.950 -                                 
12       44.33.990;                                                                                                        
13                 (7)  adopt regulations under AS 44.62 necessary to carry out the                                        
14       provisions of AS 44.33.950 - 44.33.990, including regulations to establish reasonable                             
15       fees for services provided; and                                                                                   
16                 (8)  designate agents and delegate powers as necessary to the agents.                                   
17            Sec. 44.33.960. Eligibility. (a) For an applicant to be eligible for a loan under                          
18       AS 44.33.950 - 44.33.990, the applicant shall                                                                     
19                 (1)  be a resident of the state, as determined under (b) of this section;                               
20                 (2)  provide a reasonable amount of money from other nonstate sources                                   
21       for use on any project or enterprise for which money from a loan will be used; and                                
22                 (3)  if the requested loan amount is $35,000 or more, provide to the                                    
23       department a document from a state financial institution stating that                                             
24                      (A)  the applicant has been denied a loan for the same purpose;                                    
25            or                                                                                                           
26                      (B)  a loan from the financial institution is contingent on the                                    
27            applicant also receiving a loan from the fund.                                                               
28            (b)  To meet the residency requirements of (a) of this section, the applicant                                
29                 (1)  shall physically reside in this state and maintain a domicile in this                              
30       state during the 12 consecutive months preceding the date of application for the                                  
31       program; 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 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)  may not bear interest at a rate greater than the prime rate, as                                    
12       defined in AS 44.88.599, plus one percentage point but which may not be less than six                             
13       percent a year and not more than eight percent a 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) The foreclosure expense                                   
19       account is established as a special account in the Alaska microloan revolving loan                                
20       fund.                                                                                                             
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 an obligor defaults.                                                                            
25            Sec. 44.33.975. Default. If the borrower defaults on 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 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. This Act takes effect immediately under AS 01.10.070(c).