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SCS CSHB 121(FIN): "An Act relating to certain commercial fishing loans and to loans for the purchase of fishing quota shares by certain community quota entities and 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                SENATE CS FOR CS FOR HOUSE BILL NO. 121(FIN)                                                             
01 "An Act relating to certain commercial fishing loans and to loans for the purchase of                                   
02 fishing quota shares by certain community quota entities and establishing the                                           
03 commercial charter fisheries revolving loan fund, the mariculture revolving loan fund,                                  
04 and the Alaska microloan revolving loan fund and relating to those funds and loans                                      
05 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(a) is amended to read:                                                                   
08            (a)  Except as permitted in (h) and (l) of this section, a loan under                                    
09       AS 16.10.300 - 16.10.370                                                                                          
10                 (1)  may not exceed a term of 15 years, except for extensions under                                     
11       AS 16.10.310(a)(4);                                                                                               
12                 (2)  may not bear interest                                                                              
13                      (A)  exceeding the prime rate, as defined by AS 44.88.599, plus                                
01            two percentage points;                                                                                   
02                      (B)  at a rate of [, BUT NOT] more than 10 1/2 percent a year;                             
03            or                                                                                                       
04                      (C)  at a rate that is less than the cost of funds to the state;                               
05                 (3)  must be secured by a first priority lien and appropriate security                                  
06       agreement;                                                                                                        
07                 (4)  may not exceed 80 percent of the appraised value of the collateral                                 
08       used to secure the loan; 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    * Sec. 2. AS 16.10.320(j) is amended to read:                                                                      
13            (j)  All principal and interest payments, and any money chargeable to principal                              
14       or interest that is collected through liquidation by foreclosure or other process, on                         
15       loans made under AS 16.10.300 - 16.10.370, except loans made under                                            
16       AS 16.10.310(a)(1)(E) after June 30, 2012, shall be paid into the commercial fishing                          
17       revolving loan fund. All principal and interest payments, and any money                                       
18       chargeable to principal or interest that is collected through liquidation by                                  
19       foreclosure or other process, on loans made under AS 16.10.310(a)(1)(E) after                                 
20       June 30, 2012, shall be paid into the community quota entity revolving loan fund.                             
21    * Sec. 3. AS 16.10.320(j), as amended by sec. 2 of this Act, is amended to read:                                   
22            (j)  All principal and interest payments, and any money chargeable to principal                              
23       or interest that is collected through liquidation by foreclosure or other process [,] on                          
24       loans made under AS 16.10.300 - 16.10.370, [EXCEPT LOANS MADE UNDER                                               
25       AS 16.10.310(a)(1)(E) AFTER JUNE 30, 2012,] shall be paid into the commercial                                     
26       fishing revolving loan fund. [ALL PRINCIPAL AND INTEREST PAYMENTS,                                                
27       AND ANY MONEY CHARGEABLE TO PRINCIPAL OR INTEREST THAT IS                                                         
28       COLLECTED THROUGH LIQUIDATION BY FORECLOSURE OR OTHER                                                             
29       PROCESS, ON LOANS MADE UNDER AS 16.10.310(a)(1)(E) AFTER JUNE 30,                                                 
30       2012, SHALL BE PAID INTO THE COMMUNITY QUOTA ENTITY                                                               
31       REVOLVING LOAN FUND.]                                                                                             
01    * Sec. 4. AS 16.10.320 is amended by adding new subsections to read:                                               
02            (l)  Until a community quota entity has used loans under this subsection to                                  
03       purchase fishing quota shares cumulatively authorizing a total take of 50,000 pounds,                             
04       a loan or a portion of a loan made to that community quota entity under                                           
05       AS 16.10.310(a)(1)(E) may not exceed 95 percent of the appraised value of the                                     
06       collateral used to secure the loan or a portion of the loan. A loan to a community quota                          
07       entity under AS 16.10.310(a)(1)(E)                                                                                
08                 (1)  may not exceed a term of 25 years, except for extensions under                                     
09       AS 16.10.310(a)(4);                                                                                               
10                 (2)  may not, alone or in combination with other loans to the                                           
11       community quota entity under AS 16.10.310(a)(4), exceed $1,000,000 in loans to one                                
12       community quota entity;                                                                                           
13                 (3)  may have terms that allow for a community quota entity to defer                                    
14       interest payments for up to two years; and                                                                        
15                 (4)  is not eligible for refinancing by the department.                                                 
16            (m)  In this section, "cost of funds" means the true interest cost expressed as a                            
17       rate based on the prime rate plus one percentage point plus an additional percentage                              
18       determined by the department to represent risk of loss, term of credit facility, the                              
19       allocable expense of operation, cost of issuance, and loan servicing costs.                                       
20    * Sec. 5. AS 16.10.340 is amended to read:                                                                         
21            Sec. 16.10.340. Creation of fund. (a) There is a commercial fishing revolving                              
22       loan fund to carry out the purpose of AS 16.10.300 - 16.10.370, except that the fund                          
23       may not be used to make loans under AS 16.10.310(a)(1)(E).                                                    
24            (b)  Money in the fund may be used by the legislature to make appropriations                                 
25       for costs of administering AS 16.10.300 - 16.10.370, except for costs associated with                         
26       loans under AS 16.10.310(a)(1)(E).                                                                            
27            (c)  If the commissioner determines that the fund contains money that is excess                              
28       to that needed under (a) and (b) of this section to carry out the purpose of                                  
29       AS 16.10.300 - 16.10.370, then the commissioner may use the excess money to carry                                 
30       out the purpose of AS 16.10.500 - 16.10.560.                                                                      
31    * Sec. 6. AS 16.10.340, as amended by sec. 5 of this Act, is amended to read:                                      
01            Sec. 16.10.340. Creation of fund. (a) There is a commercial fishing revolving                              
02       loan fund to carry out the purpose of AS 16.10.300 - 16.10.370 [, EXCEPT THAT                                     
03       THE FUND MAY NOT BE USED TO MAKE LOANS UNDER                                                                      
04       AS 16.10.310(a)(1)(E)].                                                                                           
05            (b)  Money in the fund may be used by the legislature to make appropriations                                 
06       for costs of administering AS 16.10.300 - 16.10.370 [, EXCEPT FOR COSTS                                           
07       ASSOCIATED WITH LOANS UNDER AS 16.10.310(a)(1)(E)].                                                               
08            (c)  If the commissioner determines that the fund contains money that is excess                              
09       to that needed [UNDER (a) AND (b) OF THIS SECTION] to carry out the purpose of                                    
10       AS 16.10.300 - 16.10.370, then the commissioner may use the excess money to carry                                 
11       out the purpose of AS 16.10.500 - 16.10.560.                                                                      
12    * Sec. 7. AS 16.10.342(c) is amended to read:                                                                      
13            (c)  The commissioner may expend money credited to the foreclosure expense                                   
14       account when necessary to protect the state's security interest in collateral on loans                            
15       granted under AS 16.10.300 - 16.10.370, except loans under AS 16.10.310(a)(1)(E),                             
16       or to defray expenses incurred during foreclosure proceedings after a default by an                               
17       obligor.                                                                                                          
18    * Sec. 8. AS 16.10.342(c), as amended by sec. 7 of this Act, is amended to read:                                   
19            (c)  The commissioner may expend money credited to the foreclosure expense                                   
20       account when necessary to protect the state's security interest in collateral on loans                            
21       granted under AS 16.10.300 - 16.10.370 [, EXCEPT LOANS UNDER                                                      
22       AS 16.10.310(a)(1)(E),] or to defray expenses incurred during foreclosure proceedings                             
23       after a default by an obligor.                                                                                    
24    * Sec. 9. AS 16.10 is amended by adding a new section to read:                                                     
25            Sec. 16.10.345. Community quota entity revolving loan fund. (a) The                                        
26       community quota entity revolving loan fund is created. The commissioner may use the                               
27       fund for loans made under AS 16.10.310(a)(1)(E) after June 30, 2012, and before                                   
28       June 30, 2017, and for administrative and other costs associated with those loans.                                
29            (b)  The foreclosure expense account is established as a special account in the                              
30       community quota entity revolving loan fund. The commissioner may expend money                                     
31       credited to the foreclosure expense account when necessary to protect the state's                                 
01       security interest in collateral on loans made under AS 16.10.310(a)(1)(E) after                                   
02       June 30, 2012, or to defray expenses incurred during foreclosure proceedings after a                              
03       default by an obligor.                                                                                            
04    * Sec. 10. AS 16.10.350(a) is amended to read:                                                                     
05            (a)  The commissioner shall administer the commercial fishing revolving                                  
06       loan fund and the community quota entity revolving loan fund.                                               
07    * Sec. 11. AS 16.10.350(a), as amended by sec. 10 of this Act, is amended to read:                                 
08            (a)  The commissioner shall administer the commercial fishing revolving loan                                 
09       fund [AND THE COMMUNITY QUOTA ENTITY REVOLVING LOAN FUND].                                                        
10    * Sec. 12. AS 16.10 is amended by adding new sections to read:                                                     
11           Article 13. Commercial Charter Fisheries Revolving Loan Fund.                                               
12            Sec. 16.10.801. Commercial charter fisheries revolving loan fund. (a) The                                  
13       commercial charter fisheries revolving loan fund is created in the Department of                                  
14       Commerce, Community, and Economic Development to carry out the purposes of                                        
15       AS 16.10.801 - 16.10.890.                                                                                         
16            (b)  The commercial charter fisheries revolving loan fund consists of the                                    
17       following:                                                                                                        
18                 (1)  money appropriated to, transferred to, or received by gift, grant,                                 
19       devise, bequest, or donation to the fund;                                                                         
20                 (2)  principal and interest payments or other income earned on loans or                                 
21       investments of the fund;                                                                                          
22                 (3)  money chargeable to principal or interest that is collected through                                
23       liquidation by foreclosure or other process on loans made under AS 16.10.801 -                                    
24       16.10.890.                                                                                                        
25            (c)  Money in the fund may be used by the legislature to make appropriations                                 
26       for costs of administering AS 16.10.801 - 16.10.890.                                                              
27            Sec. 16.10.805. Powers and duties of the department. The department may                                    
28                 (1)  make loans to eligible applicants under AS 16.10.801 - 16.10.890                                   
29                      (A)  for the purchase of charter halibut permits;                                                  
30                      (B)  to refinance debt obligations made by other lenders more                                      
31            than 12 months before the department received the loan application and                                       
01            incurred by an applicant for the purchase of charter halibut fishing vessels or                              
02            gear if the applicant otherwise qualifies for a loan under AS 16.10.801 -                                    
03            16.10.890; the department may collect a refinancing loan origination charge as                               
04            provided by regulation;                                                                                      
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 16.10.801 - 16.10.890;                                                                        
14                 (5)  establish the rate of interest for loans consistent with law;                                      
15                 (6)  charge and collect fees for services provided under AS 16.10.801 -                                 
16       16.10.890;                                                                                                        
17                 (7)  adopt regulations under AS 44.62 necessary to carry out the                                        
18       provisions of AS 16.10.801 - 16.10.890, 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. 16.10.810. Eligibility. (a) For an applicant to be eligible for a loan under                          
22       AS 16.10.801 - 16.10.890, the applicant shall be a resident of the state, as determined                           
23       under (c) of this section, and shall                                                                              
24                 (1)  qualify for the purchase of a charter halibut permit under applicable                              
25       law; or                                                                                                           
26                 (2)  qualify as a transferee for a charter halibut permit under applicable                              
27       law.                                                                                                              
28            (b)  In addition to the requirements set out in (a) of this section, the applicant                           
29       must provide to the department a document from a state financial institution stating                              
30       that                                                                                                              
31                 (1)  the applicant has been denied a loan for the same purpose; or                                      
01                 (2)  a loan from the financial institution is contingent on the applicant                               
02       also receiving a loan from the fund.                                                                              
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)  for a charter halibut permit may not exceed the permit value                                       
14       determined by a 12-month rolling average set quarterly by the department for like                                 
15       permits;                                                                                                          
16                 (2)  for a loan other than a loan for a charter halibut permit may not                                  
17       exceed $100,000 a year;                                                                                           
18                 (3)  may not exceed a term of 15 years, except for extensions under                                     
19       AS 16.10.805;                                                                                                     
20                 (4)  may not bear interest at a rate greater than the prime rate, as                                    
21       defined in AS 44.88.599, plus two percentage points, but which may not be less than                               
22       six percent a year and not more than 10 1/2 percent a year;                                                       
23                 (5)  must be secured by a first priority lien on collateral acceptable to                               
24       the commissioner, which may include collateral other than a charter halibut permit;                               
25       and                                                                                                               
26                 (6)  may not be made to a person who has a past due child support                                       
27       obligation established by court order or by the child support services agency under                               
28       AS 25.27.160 - 25.27.220 at the time of application.                                                              
29            (b)  The total balances outstanding on loans made to a borrower under                                        
30       AS 16.10.805 may not exceed $200,000.                                                                             
31            Sec. 16.10.820. Default. If the borrower defaults on a note, the department                                
01       shall notify the borrower of the default and the consequences of default by mailing a                             
02       notice to the borrower's most recent address provided to the department by the                                    
03       borrower or obtained by the department.                                                                           
04            Sec. 16.10.825. Special account established. (a) The foreclosure expense                                   
05       account is established as a special account within the commercial charter fisheries                               
06       revolving loan fund.                                                                                              
07            (b)  The department may expend money credited to the foreclosure expense                                     
08       account when necessary to protect the state's security interest in collateral on loans                            
09       granted under AS 16.10.815 or to defray expenses incurred during foreclosure                                      
10       proceedings after an obligor defaults.                                                                            
11            Sec. 16.10.830. Disposal of property acquired after default. The department                                
12       shall dispose of property acquired through default of a loan made under AS 16.10.801                              
13       - 16.10.890. Disposal must be made in a manner that serves the best interest of the                               
14       state and may include the amortization of payments over a period of years.                                        
15            Sec. 16.10.835. Waiver of confidentiality. The commissioner may release                                    
16       information about the borrower's loan to any individual if release of the information                             
17       has been authorized by the borrower.                                                                              
18            Sec. 16.10.890. Definitions. In AS 16.10.801 - 16.10.890,                                                  
19                 (1)  "commissioner" means the commissioner of commerce,                                                 
20       community, and economic development;                                                                              
21                 (2)  "department" means the Department of Commerce, Community,                                          
22       and Economic Development.                                                                                         
23                 Article 14. Mariculture Revolving Loan Fund.                                                          
24            Sec. 16.10.900. Mariculture revolving loan fund. (a) The mariculture                                       
25       revolving loan fund is created within the Department of Commerce, Community, and                                  
26       Economic Development to carry out the purposes of AS 16.10.900 - 16.10.945.                                       
27            (b)  The mariculture revolving loan fund consists of the following:                                          
28                 (1)  money appropriated to, transferred to, or received by gift, grant,                                 
29       devise, bequest, or donation to the fund;                                                                         
30                 (2)  principal and interest payments or other income earned on loans or                                 
31       investments of the fund; and                                                                                      
01                 (3)  money chargeable to principal or interest that is collected through                                
02       liquidation by foreclosure or other process on loans made under AS 16.10.900 -                                    
03       16.10.945.                                                                                                        
04            (c)  Money in the fund may be used by the legislature to make appropriations                                 
05       for costs of administering AS 16.10.900 - 16.10.945.                                                              
06            Sec. 16.10.905. Powers and duties of the department. The department may                                    
07                 (1)  make loans to eligible applicants under AS 16.10.900 - 16.10.945                                   
08       for the planning, construction, and operation of a mariculture business;                                          
09                 (2)  receive, take, hold, and administer any appropriation, transfer, gift,                             
10       grant, bequest, devise, or donation of money for the fund;                                                        
11                 (3)  establish amortization plans for repayment of loans, including                                     
12       extensions of the terms of loans;                                                                                 
13                 (4)  allow an assumption of a loan if                                                                   
14                      (A)  the applicant meets the requirements established under this                                   
15            section; and                                                                                                 
16                      (B)  approval of the assumption would be consistent with the                                       
17            purposes of AS 16.10.900 - 16.10.945;                                                                        
18                 (5)  establish the rate of interest for loans consistent with law;                                      
19                 (6)  charge and collect fees for services provided under AS 16.10.900 -                                 
20       16.10.945;                                                                                                        
21                 (7)  adopt regulations under AS 44.62 necessary to carry out the                                        
22       provisions of AS 16.10.900 - 16.10.945, including regulations to establish reasonable                             
23       fees for services provided; and                                                                                   
24                 (8)  designate agents and delegate powers as necessary to the agents.                                   
25            Sec. 16.10.910. Eligibility. (a) For an applicant to be eligible for a loan under                          
26       AS 16.10.900 - 16.10.945, the applicant shall                                                                     
27                 (1)  be a resident of the state, as determined under (c) of this section;                               
28                 (2)  have a permitted mariculture farm location in this state; and                                      
29                 (3)  have experience or training in the mariculture industry.                                           
30            (b)  In addition to the requirements set out in (a) of this section, the applicant                           
31                 (1)  may not be eligible for financing from other recognized                                            
01       commercial lending institutions; or                                                                               
02                 (2)  shall be able to obtain only a portion of the total loan request from                              
03       a recognized commercial lending institution.                                                                      
04            (c)  To meet the residency requirements of (a) of this section, the applicant                                
05                 (1)  shall physically reside in this state and maintain a domicile in this                              
06       state during the 24 consecutive months preceding the date of application for the                                  
07       program; and                                                                                                      
08                 (2)  may not have                                                                                       
09                      (A)  declared or established residency in another state; or                                        
10                      (B)  received residency or a benefit based on residency from                                       
11            another state.                                                                                               
12            Sec. 16.10.915. Limitations on loans. (a) Except as provided in (b) and (c) of                             
13       this section, a loan under AS 16.10.900 - 16.10.945                                                               
14                 (1)  may not exceed $100,000 a year;                                                                    
15                 (2)  may not exceed a term of 20 years, except for extensions under                                     
16       AS 16.10.905;                                                                                                     
17                 (3)  may not bear interest at a rate greater than the prime rate, as                                    
18       defined in AS 44.88.599, plus one percentage point, but which may not be less than                                
19       five percent a year and not more than nine percent a year;                                                        
20                 (4)  must be secured by a first priority lien on collateral acceptable to                               
21       the department; and                                                                                               
22                 (5)  may not be made to a person who has a past due child support                                       
23       obligation established by court order or by the child support services agency under                               
24       AS 25.27.160 - 25.27.220 at the time of application.                                                              
25            (b)  Subsequent loans may be made to the borrower under AS 16.10.910 if the                                  
26       total of the balances outstanding on the loans received by the borrower does not                                  
27       exceed $300,000.                                                                                                  
28            (c)  A loan under AS 16.10.910 may be made for the purchase of boats or                                      
29       vessels determined to be integral to the operation of the farm.                                                   
30            (d)  For a loan made under AS 16.10.900 - 16.10.945, the department may                                      
31       provide a reduction of the interest rate of not more than two percent if at least 50                              
01       percent of the loan proceeds are used by the borrower for purchasing products                                     
02       manufactured or produced in the state. When the department offers a reduction under                               
03       this subsection, the department shall provide the reduction to all loan applicants who                            
04       meet the criterion described in this subsection. In this subsection, "manufactured or                             
05       produced" means processing, developing, or making an item into a new item with a                                  
06       distinct character and use.                                                                                       
07            Sec. 16.10.920. Repayment of principal of and interest on loans. The                                       
08       department may not require the repayment of principal and interest on a loan made                                 
09       under AS 16.10.910 during the first six years of the loan. Interest on the principal of a                         
10       loan made under AS 16.10.910 may be deferred for a period of not more than the first                              
11       six years of the loan.                                                                                            
12            Sec. 16.10.925. Default. If the borrower defaults on a note, the department                                
13       shall notify the borrower of the default and the consequences of default by mailing a                             
14       notice to the borrower's most recent address provided to the department by the                                    
15       borrower or obtained by the department.                                                                           
16            Sec. 16.10.930. Special account established. (a) The foreclosure expense                                   
17       account is established as a special account in the mariculture revolving loan fund.                               
18            (b)  The department may expend money credited to the foreclosure expense                                     
19       account when necessary to protect the state's security interest in collateral on loans                            
20       granted under AS 16.10.910 or to defray expenses incurred during foreclosure                                      
21       proceedings after an obligor defaults.                                                                            
22            Sec. 16.10.935. Disposal of property acquired after default. The department                                
23       shall dispose of property acquired through default of a loan made under AS 16.10.900                              
24       - 16.10.945. Disposal must be made in a manner that serves the best interest of the                               
25       state and may include the amortization of payments over a period of years.                                        
26            Sec. 16.10.940. Waiver of confidentiality. The commissioner may release                                    
27       information about the borrower's loan to any individual if release of the information                             
28       has been authorized by the borrower.                                                                              
29            Sec. 16.10.945. Definitions. In AS 16.10.900 - 16.10.945,                                                  
30                 (1)  "commissioner" means the commissioner of commerce,                                                 
31       community, and economic development;                                                                              
01                 (2)  "department" means the Department of Commerce, Community,                                          
02       and Economic Development;                                                                                         
03                 (3)  "mariculture" means the farming of shellfish and aquatic plants as                                 
04       defined in AS 16.40.199.                                                                                          
05    * Sec. 13. AS 44.33 is amended by adding new sections to read:                                                     
06               Article 15. Alaska Microloan Revolving Loan Fund.                                                       
07            Sec. 44.33.950. Alaska microloan revolving loan fund. (a) The Alaska                                       
08       microloan revolving loan fund is created in the Department of Commerce,                                           
09       Community, and Economic Development to carry out the purposes of AS 44.33.950 -                                   
10       44.33.990.                                                                                                        
11            (b)  The Alaska microloan revolving loan fund consists of the 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 44.33.950 -                                    
18       44.33.990.                                                                                                        
19            (c)  Money in the fund may be used by the legislature to make appropriations                                 
20       for costs of administering AS 44.33.950 - 44.33.990.                                                              
21            Sec. 44.33.955. Powers and duties of the department. The department may                                    
22                 (1)  make loans to eligible applicants under AS 44.33.950 - 44.33.990                                   
23       to be used for working capital, equipment, construction, or other commercial purposes                             
24       by a business located in the state;                                                                               
25                 (2)  receive, take, hold, and administer any appropriation, transfer, gift,                             
26       grant, bequest, devise, or donation of money for the fund;                                                        
27                 (3)  establish amortization plans for repayment of loans, including                                     
28       extensions of the terms of loans;                                                                                 
29                 (4)  allow an assumption of a loan if                                                                   
30                      (A)  the applicant meets the requirements established under this                                   
31            section; and                                                                                                 
01                      (B)  approval of the assumption would be consistent with the                                       
02            purposes of AS 44.33.950 - 44.33.990;                                                                        
03                 (5)  establish the rate of interest for loans consistent with law;                                      
04                 (6)  charge and collect fees for services provided under AS 44.33.950 -                                 
05       44.33.990;                                                                                                        
06                 (7)  adopt regulations under AS 44.62 necessary to carry out the                                        
07       provisions of AS 44.33.950 - 44.33.990, including regulations to establish reasonable                             
08       fees for services provided; and                                                                                   
09                 (8)  designate agents and delegate powers as necessary to the agents.                                   
10            Sec. 44.33.960. Eligibility. (a) For an applicant to be eligible for a loan under                          
11       AS 44.33.950 - 44.33.990, the applicant shall                                                                     
12                 (1)  be a resident of the state, as determined under (b) of this section;                               
13                 (2)  provide a reasonable amount of money from other nonstate sources                                   
14       for use on any project or enterprise for which money from a loan will be used; and                                
15                 (3)  if the requested loan amount is $35,000 or more, provide to the                                    
16       department a document from a state financial institution stating that                                             
17                      (A)  the applicant has been denied a loan for the same purpose;                                    
18            or                                                                                                           
19                      (B)  a loan from the financial institution is contingent on the                                    
20            applicant also receiving a loan from the fund.                                                               
21            (b)  To meet the residency requirements of (a) of this section, the applicant                                
22                 (1)  shall physically reside in this state and maintain a domicile in this                              
23       state during the 12 consecutive months preceding the date of application for the                                  
24       program; 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. 44.33.965. Limitations on loans. (a) The department may use money                                     
30       from the Alaska microloan revolving loan fund to make loans of up to $35,000 to a                                 
31       person or loans of up to $70,000 to two or more persons.                                                          
01            (b)  A loan under AS 44.33.950 - 44.33.990                                                                   
02                 (1)  may not exceed a term of six years, except for extensions under                                    
03       AS 44.33.955;                                                                                                     
04                 (2)  may not bear interest at a rate greater than the prime rate, as                                    
05       defined in AS 44.88.599, plus one percentage point but which may not be less than six                             
06       percent a year and not more than eight percent a year;                                                            
07                 (3)  must be secured by collateral acceptable to the commissioner; and                                  
08                 (4)  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            Sec. 44.33.970. Special account established. (a) The foreclosure expense                                   
12       account is established as a special account in the Alaska microloan revolving loan                                
13       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 44.33.960 or to defray expenses incurred during foreclosure                                      
17       proceedings after an obligor defaults.                                                                            
18            Sec. 44.33.975. Default. If the borrower defaults on a note, the department                                
19       shall notify the borrower of the default and the consequences of default by mailing a                             
20       notice to the borrower's most recent address provided to the department by the                                    
21       borrower or obtained by the department.                                                                           
22            Sec. 44.33.980. Disposal of property acquired after default. The department                                
23       shall dispose of property acquired through default of a loan made under AS 44.33.950                              
24       - 44.33.990. Disposal must be made in a manner that serves the best interest of the                               
25       state and may include the amortization of payments over a period of years.                                        
26            Sec. 44.33.990. Definitions. In AS 44.33.950 - 44.33.990,                                                  
27                 (1)  "commissioner" means the commissioner of commerce,                                                 
28       community, and economic development;                                                                              
29                 (2)  "department" means the Department of Commerce, Community,                                          
30       and Economic Development.                                                                                         
31    * Sec. 14. AS 16.10.345 is repealed.                                                                               
01    * Sec. 15. The uncodified law of the State of Alaska is amended by adding a new section to                         
02 read:                                                                                                                   
03       TRANSITION. Notwithstanding the repeal of AS 16.10.345 in sec. 14 of this Act, a                                  
04 loan made from the community quota entity revolving loan fund remains in effect and shall be                            
05 administered by the commissioner of commerce, community, and economic development                                       
06 under the commercial fishing revolving loan fund under AS 16.10.350.                                                    
07    * Sec. 16. Sections 3, 6, 8, 11, and 14 of this Act take effect June 30, 2017.                                     
08    * Sec. 17. Except as provided by sec. 16 of this Act, this Act takes effect immediately under                      
09 AS 01.10.070(c).