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CSHB 121(RLS): "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                       CS FOR HOUSE BILL NO. 121(RLS)                                                                    
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) The                                  
08       commercial charter fisheries revolving loan fund is created in the Department of                                  
09       Commerce, Community, and Economic Development to carry out the purposes of                                        
10       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, grant,                                 
14       devise, 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 the department received the loan application and                                       
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, transfer, gift,                             
22       grant, 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 AS 16.10.801 - 16.10.890;                                                                        
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 shall be a resident of the state, as determined                           
08       under (c) of this section, and shall                                                                              
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       must provide to the department a document from a state financial institution stating                              
18       that                                                                                                              
19                 (1)  the applicant has been denied a loan for the same purpose; or                                      
20                 (2)  a loan from the financial institution is contingent on the applicant                               
21       also receiving a loan from the fund.                                                                              
22            (c)  To meet the residency requirements of (a) of this section, the applicant                                
23                 (1)  shall physically reside in this state and maintain a domicile in this                              
24       state during the 24 consecutive months preceding the date of application for the                                  
25       program; 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. 16.10.815. Limitations on loans. (a) Except as provided in (b) of this                                
31       section, a loan under AS 16.10.801 - 16.10.890                                                                    
01                 (1)  may not exceed $100,000 a year;                                                                    
02                 (2)  may not exceed a term of 15 years, except for extensions under                                     
03       AS 16.10.805;                                                                                                     
04                 (3)  may not bear interest at a rate greater than the prime rate, as                                    
05       defined in AS 44.88.599, plus two percentage points, but which may not be less than                               
06       six percent a year and not more than 10 1/2 percent a year;                                                       
07                 (4)  must be secured by a first priority lien on collateral acceptable to                               
08       the commissioner, which may include collateral other than a charter halibut permit;                               
09       and                                                                                                               
10                 (5)  may not be made to a person who has a past due child support                                       
11       obligation established by court order or by the child support services agency under                               
12       AS 25.27.160 - 25.27.220 at the time of application.                                                              
13            (b)  The interest rate for loans for the improvement of engine fuel efficiency                               
14       must be two percentage points below the prime rate, as defined in AS 44.88.599, but                               
15       may not be less than six percent a year and not more than 10 1/2 percent a year.                                  
16            (c)  The total balances outstanding on loans made to a borrower under                                        
17       AS 16.10.805 may not exceed $200,000.                                                                             
18            (d)  After the initial interest rate is set under (a) or (b) of this section for a loan                      
19       made under AS 16.10.801 - 16.10.890, the department may provide a reduction of the                                
20       interest rate of not more than two percent if at least 50 percent of the loan proceeds are                        
21       used by the borrower for engine fuel efficiency improvements if the upgrades use                                  
22       products manufactured or produced in the state. When the department offers a                                      
23       reduction under this subsection, the department shall provide the reduction to all loan                           
24       applicants who meet the criterion described in this subsection. In this subsection,                               
25       "manufactured or produced" means processing, developing, or making an item into a                                 
26       new item with a distinct character and use.                                                                       
27            Sec. 16.10.820. Default. If the borrower defaults on a note, the department                                
28       shall notify the borrower of the default and the consequences of default by mailing a                             
29       notice to the borrower's most recent address provided to the department by the                                    
30       borrower or obtained by the department.                                                                           
31            Sec. 16.10.825. Special account established. (a) The foreclosure expense                                   
01       account is established as a special account within the commercial charter fisheries                               
02       revolving loan fund.                                                                                              
03            (b)  The department may expend money credited to the foreclosure expense                                     
04       account when necessary to protect the state's security interest in collateral on loans                            
05       granted under AS 16.10.815 or to defray expenses incurred during foreclosure                                      
06       proceedings after an obligor defaults.                                                                            
07            Sec. 16.10.830. Disposal of property acquired after default. The department                                
08       shall dispose of property acquired through default of a loan made under AS 16.10.801                              
09       - 16.10.890. Disposal must be made in a manner that serves the best interest of the                               
10       state and may include the amortization of payments over a period of years.                                        
11            Sec. 16.10.835. Waiver of confidentiality. The commissioner may release                                    
12       information about the borrower's loan to any individual if release of the information                             
13       has been authorized by the borrower.                                                                              
14            Sec. 16.10.890. Definitions. In AS 16.10.801 - 16.10.890,                                                  
15                 (1)  "commissioner" means the commissioner of commerce,                                                 
16       community, and economic development;                                                                              
17                 (2)  "department" means the Department of Commerce, Community,                                          
18       and Economic Development.                                                                                         
19                 Article 14. Mariculture Revolving Loan Fund.                                                          
20            Sec. 16.10.900. Mariculture revolving loan fund. (a) The mariculture                                       
21       revolving loan fund is created within the Department of Commerce, Community, and                                  
22       Economic Development to carry out the purposes of AS 16.10.900 - 16.10.945.                                       
23            (b)  The mariculture revolving loan fund consists of the following:                                          
24                 (1)  money appropriated to, transferred to, or received by gift, grant,                                 
25       devise, bequest, or donation to the fund;                                                                         
26                 (2)  principal and interest payments or other income earned on loans or                                 
27       investments of the fund; and                                                                                      
28                 (3)  money chargeable to principal or interest that is collected through                                
29       liquidation by foreclosure or other process on loans made under AS 16.10.900 -                                    
30       16.10.945.                                                                                                        
31            (c)  Money in the fund may be used by the legislature to make appropriations                                 
01       for costs of administering AS 16.10.900 - 16.10.945.                                                              
02            Sec. 16.10.905. Powers and duties of the department. The department may                                    
03                 (1)  make loans to eligible applicants under AS 16.10.900 - 16.10.945                                   
04       for the planning, construction, and operation of a mariculture business;                                          
05                 (2)  receive, take, hold, and administer any appropriation, transfer, gift,                             
06       grant, bequest, devise, or donation of money for the fund;                                                        
07                 (3)  establish amortization plans for repayment of loans, including                                     
08       extensions of the terms of loans;                                                                                 
09                 (4)  allow an assumption of a loan if                                                                   
10                      (A)  the applicant meets the requirements established under this                                   
11            section; and                                                                                                 
12                      (B)  approval of the assumption would be consistent with the                                       
13            purposes of AS 16.10.900 - 16.10.945;                                                                        
14                 (5)  establish the rate of interest for loans consistent with law;                                      
15                 (6)  charge and collect fees for services provided under AS 16.10.900 -                                 
16       16.10.945;                                                                                                        
17                 (7)  adopt regulations under AS 44.62 necessary to carry out the                                        
18       provisions of AS 16.10.900 - 16.10.945, including regulations to establish reasonable                             
19       fees for services provided; and                                                                                   
20                 (8)  designate agents and delegate powers as necessary to the agents.                                   
21            Sec. 16.10.910. Eligibility. (a) For an applicant to be eligible for a loan under                          
22       AS 16.10.900 - 16.10.945, the applicant shall                                                                     
23                 (1)  be a resident of the state, as determined under (c) of this section;                               
24                 (2)  have a permitted mariculture farm location in this state; and                                      
25                 (3)  have experience or training in the mariculture industry.                                           
26            (b)  In addition to the requirements set out in (a) of this section, the applicant                           
27                 (1)  may not be eligible for financing from other recognized                                            
28       commercial lending institutions; or                                                                               
29                 (2)  shall be able to obtain only a portion of the total loan request from                              
30       a recognized commercial lending institution.                                                                      
31            (c)  To meet the residency requirements of (a) of this section, the applicant                                
01                 (1)  shall physically reside in this state and maintain a domicile in this                              
02       state during the 24 consecutive months preceding the date of application for the                                  
03       program; and                                                                                                      
04                 (2)  may not have                                                                                       
05                      (A)  declared or established residency in another state; or                                        
06                      (B)  received residency or a benefit based on residency from                                       
07            another state.                                                                                               
08            Sec. 16.10.915. Limitations on loans. (a) Except as provided in (b) and (c) of                             
09       this section, a loan under AS 16.10.900 - 16.10.945                                                               
10                 (1)  may not exceed $100,000 a year;                                                                    
11                 (2)  may not exceed a term of 20 years, except for extensions under                                     
12       AS 16.10.905;                                                                                                     
13                 (3)  may not bear interest at a rate greater than the prime rate, as                                    
14       defined in AS 44.88.599, plus one percentage point, but which may not be less than                                
15       five percent a year and not more than nine percent a year;                                                        
16                 (4)  must be secured by a first priority lien on collateral acceptable to                               
17       the department; and                                                                                               
18                 (5)  may not be made to a person who has a past due child support                                       
19       obligation established by court order or by the child support services agency under                               
20       AS 25.27.160 - 25.27.220 at the time of application.                                                              
21            (b)  Subsequent loans may be made to the borrower under AS 16.10.910 if the                                  
22       total of the balances outstanding on the loans received by the borrower does not                                  
23       exceed $300,000.                                                                                                  
24            (c)  A loan under AS 16.10.910 may be made for the purchase of boats or                                      
25       vessels determined to be integral to the operation of the farm.                                                   
26            (d)  For a loan made under AS 16.10.900 - 16.10.945, the department may                                      
27       provide a reduction of the interest rate of not more than two percent if at least 50                              
28       percent of the loan proceeds are used by the borrower for purchasing products                                     
29       manufactured or produced in the state. When the department offers a reduction under                               
30       this subsection, the department shall provide the reduction to all loan applicants who                            
31       meet the criterion described in this subsection. In this subsection, "manufactured or                             
01       produced" means processing, developing, or making an item into a new item with a                                  
02       distinct character and use.                                                                                       
03            Sec. 16.10.920. Repayment of principal of and interest on loans. The                                       
04       department may not require the repayment of principal and interest on a loan made                                 
05       under AS 16.10.910 during the first six years of the loan. Interest on the principal of a                         
06       loan made under AS 16.10.910 may be deferred for a period of not more than the first                              
07       six years of the loan.                                                                                            
08            Sec. 16.10.925. Default. If the borrower defaults on a note, the department                                
09       shall notify the borrower of the default and the consequences of default by mailing a                             
10       notice to the borrower's most recent address provided to the department by the                                    
11       borrower or obtained by the department.                                                                           
12            Sec. 16.10.930. Special account established. (a) The foreclosure expense                                   
13       account is established as a special account in the mariculture 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 16.10.910 or to defray expenses incurred during foreclosure                                      
17       proceedings after an obligor defaults.                                                                            
18            Sec. 16.10.935. Disposal of property acquired after default. The department                                
19       shall dispose of property acquired through default of a loan made under AS 16.10.900                              
20       - 16.10.945. 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. 16.10.940. 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. 16.10.945. Definitions. In AS 16.10.900 - 16.10.945,                                                  
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                 (3)  "mariculture" means the farming of shellfish and aquatic plants as                                 
31       defined in AS 16.40.199.                                                                                          
01    * Sec. 2. AS 44.33 is amended by adding new sections to read:                                                      
02               Article 15. Alaska Microloan Revolving Loan Fund.                                                       
03            Sec. 44.33.950. Alaska microloan revolving loan fund. (a) The Alaska                                       
04       microloan revolving loan fund is created in the Department of Commerce,                                           
05       Community, and Economic Development to carry out the purposes of AS 44.33.950 -                                   
06       44.33.990.                                                                                                        
07            (b)  The Alaska microloan revolving loan fund consists of the following:                                     
08                 (1)  money appropriated to, transferred to, or received by gift, grant,                                 
09       devise, bequest, or donation to the fund;                                                                         
10                 (2)  principal and interest payments or other income earned on loans or                                 
11       investments of the fund;                                                                                          
12                 (3)  money chargeable to principal or interest that is collected through                                
13       liquidation by foreclosure or other process on loans made under AS 44.33.950 -                                    
14       44.33.990.                                                                                                        
15            (c)  Money in the fund may be used by the legislature to make appropriations                                 
16       for costs of administering AS 44.33.950 - 44.33.990.                                                              
17            Sec. 44.33.955. Powers and duties of the department. The department may                                    
18                 (1)  make loans to eligible applicants under AS 44.33.950 - 44.33.990                                   
19       to be used for working capital, equipment, construction, or other commercial purposes                             
20       by a business located in the state;                                                                               
21                 (2)  receive, take, hold, and administer any appropriation, transfer, gift,                             
22       grant, 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 AS 44.33.950 - 44.33.990;                                                                        
30                 (5)  establish the rate of interest for loans consistent with law;                                      
31                 (6)  charge and collect fees for services provided under AS 44.33.950 -                                 
01       44.33.990;                                                                                                        
02                 (7)  adopt regulations under AS 44.62 necessary to carry out the                                        
03       provisions of AS 44.33.950 - 44.33.990, 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. 44.33.960. Eligibility. (a) For an applicant to be eligible for a loan under                          
07       AS 44.33.950 - 44.33.990, the applicant shall                                                                     
08                 (1)  be a resident of the state, as determined under (b) of this section;                               
09                 (2)  provide a reasonable amount of money from other nonstate sources                                   
10       for use on any project or enterprise for which money from a loan will be used; and                                
11                 (3)  if the requested loan amount is $35,000 or more, provide to the                                    
12       department a document from a state financial institution stating that                                             
13                      (A)  the applicant has been denied a loan for the same purpose;                                    
14            or                                                                                                           
15                      (B)  a loan from the financial institution is contingent on the                                    
16            applicant also receiving a loan from the fund.                                                               
17            (b)  To meet the residency requirements of (a) of this section, the applicant                                
18                 (1)  shall physically reside in this state and maintain a domicile in this                              
19       state during the 12 consecutive months preceding the date of application for the                                  
20       program; and                                                                                                      
21                 (2)  may not have                                                                                       
22                      (A)  declared or established residency in another state; or                                        
23                      (B)  received residency or a benefit based on residency from                                       
24            another state.                                                                                               
25            Sec. 44.33.965. Limitations on loans. (a) The department may use money                                     
26       from the Alaska microloan revolving loan fund to make loans of up to $35,000 to a                                 
27       person or loans of up to $70,000 to two or more persons.                                                          
28            (b)  A loan under AS 44.33.950 - 44.33.990                                                                   
29                 (1)  may not exceed a term of six years, except for extensions under                                    
30       AS 44.33.955;                                                                                                     
31                 (2)  may not bear interest at a rate greater than the prime rate, as                                    
01       defined in AS 44.88.599, plus one percentage point but which may not be less than six                             
02       percent a year and not more than eight percent a year;                                                            
03                 (3)  must be secured by collateral acceptable to the commissioner; and                                  
04                 (4)  may not be made to a person who has a past due child support                                       
05       obligation established by court order or by the child support services agency under                               
06       AS 25.27.160 - 25.27.220 at the time of application.                                                              
07            Sec. 44.33.970. Special account established. (a) The foreclosure expense                                   
08       account is established as a special account in the Alaska microloan revolving loan                                
09       fund.                                                                                                             
10            (b)  The department may expend money credited to the foreclosure expense                                     
11       account when necessary to protect the state's security interest in collateral on loans                            
12       granted under AS 44.33.960 or to defray expenses incurred during foreclosure                                      
13       proceedings after an obligor defaults.                                                                            
14            Sec. 44.33.975. Default. If the borrower defaults on a note, the department                                
15       shall notify the borrower of the default and the consequences of default by mailing a                             
16       notice to the borrower's most recent address provided to the department by the                                    
17       borrower or obtained by the department.                                                                           
18            Sec. 44.33.980. Disposal of property acquired after default. The department                                
19       shall dispose of property acquired through default of a loan made under AS 44.33.950                              
20       - 44.33.990. 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. 44.33.990. Definitions. In AS 44.33.950 - 44.33.990,                                                  
23                 (1)  "commissioner" means the commissioner of commerce,                                                 
24       community, and economic development;                                                                              
25                 (2)  "department" means the Department of Commerce, Community,                                          
26       and Economic Development.                                                                                         
27    * Sec. 3. This Act takes effect immediately under AS 01.10.070(c).