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SB 34: "An Act establishing the Alaska small business revolving loan fund; relating to the fund and loans from the fund; and providing for an effective date."

00                             SENATE BILL NO. 34                                                                          
01 "An Act establishing the Alaska small business revolving loan fund; relating to the fund                                
02 and loans from the fund; and providing for an effective date."                                                          
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1. The uncodified law of the State of Alaska is amended by adding a new section                          
05 to read:                                                                                                                
06       SHORT TITLE. This Act may be known as the Alaska Small Business Act.                                              
07    * Sec. 2. AS 44.33 is amended by adding new sections to read:                                                      
08              Article 15. Alaska Small Business Revolving Loan Fund.                                                   
09            Sec. 44.33.950. Alaska small business revolving loan fund. (a) A revolving                                 
10       loan fund to be known as the Alaska small business revolving loan fund is created in                              
11       the general fund. The Department of Commerce, Community, and Economic                                             
12       Development may use money in the fund to carry out the purposes of AS 44.33.950 -                                 
13       44.33.990.                                                                                                        
14            (b)  The fund consists of the following:                                                                     
01                 (1)  money appropriated to the fund, including money appropriated                                       
02       from the following sources:                                                                                       
03                      (A)  interest payments or other income earned on loans or                                          
04            investments of the fund;                                                                                     
05                      (B)  money chargeable to interest that is collected through                                        
06            liquidation by foreclosure or other process on loans made under AS 44.33.950                                 
07            - 44.33.990; and                                                                                             
08                      (C)  money received by gift, devise, bequest, or donation to the                                   
09            fund;                                                                                                        
10                 (2)  principal payments on loans from the fund;                                                         
11                 (3)  money chargeable to principal that is collected through liquidation                                
12       by foreclosure or other process on loans made under AS 44.33.950 - 44.33.990.                                     
13            (c)  Money in the fund may be used by the legislature to make appropriations                                 
14       for costs of administering AS 44.33.950 - 44.33.990.                                                              
15            Sec. 44.33.955. Powers and duties of the department. The department may                                    
16                 (1)  make loans from the fund to eligible applicants under                                              
17       AS 44.33.960 to be used for working capital, equipment, construction, or other                                    
18       commercial purposes by a business located in the state;                                                           
19                 (2)  receive, take, hold, and administer any appropriation, gift, grant,                                
20       bequest, devise, or donation of money for the fund;                                                               
21                 (3)  establish amortization plans for repayment of loans, including                                     
22       extensions of the terms of loans;                                                                                 
23                 (4)  allow an assumption of a loan if                                                                   
24                      (A)  the applicant meets the requirements established under                                        
25            AS 44.33.960; and                                                                                            
26                      (B)  approval of the assumption would be consistent with the                                       
27            purposes of this section;                                                                                    
28                 (5)  establish the rate of interest for loans consistent with law;                                      
29                 (6)  charge and collect fees for services provided under AS 44.33.950 -                                 
30       44.33.990;                                                                                                        
31                 (7)  adopt regulations under AS 44.62 necessary to carry out the                                        
01       provisions of AS 44.33.950 - 44.33.990, including regulations to establish reasonable                             
02       fees for services provided; and                                                                                   
03                 (8)  designate agents and delegate powers as necessary to the agents.                                   
04            Sec. 44.33.960. Eligibility. (a) For an applicant to be eligible for a loan under                          
05       AS 44.33.950 - 44.33.990, the applicant must                                                                      
06                 (1)  be a resident of the state as determined under (b) of this section;                                
07       and                                                                                                               
08                 (2)  provide from a source that is not a state agency or a public                                       
09       corporation of the state 20 percent of the money to be used on the project or enterprise                          
10       for which money from a loan will be used.                                                                       
11            (b)  To meet the residency requirements of (a) of this section, the applicant                                
12                 (1)  must physically reside in this state and maintain a domicile in this                               
13       state during the 12 consecutive months before the date of application for the program;                            
14       and                                                                                                               
15                 (2)  may not have                                                                                       
16                      (A)  declared or established residency in another state; or                                        
17                      (B)  received residency or a benefit based on residency from                                       
18            another state in the previous 12 months.                                                                     
19            Sec. 44.33.965. Limitations on loans. (a) The department may use money                                     
20       from the fund to make loans of up to $50,000 to one individual or loans of up to                                  
21       $100,000 to two or more individuals.                                                                              
22            (b)  A loan established under AS 44.33.950 - 44.33.990                                                       
23                 (1)  may not exceed a term of six years, except for extensions                                          
24       authorized under AS 44.33.955 or regulations adopted under AS 44.33.955;                                          
25                 (2)  may not bear interest exceeding the prime rate, as defined in                                      
26       AS 44.88.599, plus one percentage point, but interest may not be less than six percent                            
27       a year;                                                                                                           
28                 (3)  must be secured by collateral acceptable to the commissioner; and                                  
29                 (4)  may not be made to an individual who has a past due child support                                  
30       obligation established by court order or by the child support services agency under                               
31       AS 25.27.160 - 25.27.220 at the time of application.                                                              
01            Sec. 44.33.970. Special account established. (a) The foreclosure expense                                   
02       account is established as a special account in the 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 44.33.965 or to defray expenses incurred during foreclosure                                      
06       proceedings after a default by an obligor.                                                                        
07            Sec. 44.33.975. Disposal of property acquired by default or foreclosure.                                   
08       The department shall dispose of property acquired through default or foreclosure of a                             
09       loan made under AS 44.33.950 - 44.33.990. Disposal must be made in a manner that                                  
10       serves the best interest of the state and may include the amortization of payments over                           
11       a period of years.                                                                                                
12            Sec. 44.33.990. Definitions. In AS 44.33.950 - 44.33.990, unless the context                               
13       otherwise requires,                                                                                               
14                 (1)  "commissioner" means the commissioner of commerce,                                                 
15       community, and economic development;                                                                              
16                 (2)  "department" means the Department of Commerce, Community,                                          
17       and Economic Development;                                                                                         
18                 (3)  "fund" means the Alaska small business revolving loan fund.                                        
19    * Sec. 3. The uncodified law of the State of Alaska is amended by adding a new section to                        
20 read:                                                                                                                 
21       TRANSITION: REGULATIONS. The Department of Commerce, Community, and                                               
22 Economic Development may immediately proceed to adopt regulations under AS 44.62                                        
23 (Administrative Procedure Act) necessary to implement the changes made in sec. 2 of this                                
24 Act. The regulations take effect under AS 44.62 but not before July 1, 2011.                                            
25    * Sec. 4. Section 3 of this Act takes effect immediately under AS 01.10.070(c).                                    
26    * Sec. 5. Except as provided in sec. 4 of this Act, this Act takes effect July 1, 2011.