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CSSB 34(L&C): "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                       CS FOR SENATE BILL NO. 34(L&C)                                                                    
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. The uncodified law of the State of Alaska is amended by adding a new section to                          
08 read:                                                                                                                   
09       LEGISLATIVE INTENT. It is the legislature's intent in this Act to provide small,                                  
10 short-term loans to small businesses in order to promote economic development in the state                              
11 by creating jobs and economic opportunities for the citizens of the state.                                              
12    * Sec. 3. AS 44.33 is amended by adding new sections to read:                                                      
13              Article 15. Alaska Small Business Revolving Loan Fund.                                                   
14            Sec. 44.33.950. Alaska small business revolving loan fund. (a) A revolving                                 
01       loan fund to be known as the Alaska small business revolving loan fund is created in                              
02       the general fund. The Department of Commerce, Community, and Economic                                             
03       Development may use money in the fund to carry out the purposes of AS 44.33.950 -                                 
04       44.33.990.                                                                                                        
05            (b)  The fund consists of the following:                                                                     
06                 (1)  money appropriated to the fund, including money appropriated                                       
07       from the following sources:                                                                                       
08                      (A)  interest payments or other income earned on loans or                                          
09            investments of the fund;                                                                                     
10                      (B)  money chargeable to interest that is collected through                                        
11            liquidation by foreclosure or other process on loans made under AS 44.33.950                                 
12            - 44.33.990; and                                                                                             
13                      (C)  money received by gift, grant, devise, bequest, or donation                                   
14            to the fund;                                                                                                 
15                 (2)  principal payments on loans from the fund;                                                         
16                 (3)  money chargeable to principal that is collected through liquidation                                
17       by foreclosure or other process on loans made under AS 44.33.950 - 44.33.990.                                     
18            (c)  Money in the fund may be used by the legislature to make appropriations                                 
19       for costs of administering AS 44.33.950 - 44.33.990.                                                              
20            Sec. 44.33.955. Powers and duties of the department. The department may                                    
21                 (1)  make loans from the fund to eligible applicants under                                              
22       AS 44.33.960(a)(1) to be used for working capital, equipment, construction, or other                              
23       commercial purposes by a business located in the state;                                                           
24                 (2)  receive, take, hold, and administer any appropriation, gift, grant,                                
25       bequest, devise, or donation of money for the fund;                                                               
26                 (3)  establish amortization plans for repayment of loans, including                                     
27       extensions of the terms of loans;                                                                                 
28                 (4)  allow an assumption of a loan if                                                                   
29                      (A)  the applicant meets the requirements established under                                        
30            AS 44.33.960; and                                                                                            
31                      (B)  approval of the assumption would be consistent with the                                       
01            purposes of this section;                                                                                    
02                 (5)  establish the rate of interest for loans consistent with law;                                      
03                 (6)  charge and collect fees for services provided under AS 44.33.950 -                                 
04       44.33.990;                                                                                                        
05                 (7)  adopt regulations under AS 44.62 necessary to carry out the                                        
06       provisions of AS 44.33.950 - 44.33.990, including regulations to establish reasonable                             
07       fees for services provided; and                                                                                   
08                 (8)  designate agents and delegate powers as necessary to the agents.                                   
09            Sec. 44.33.960. Eligibility. (a) For an applicant to be eligible for a loan under                          
10       AS 44.33.950 - 44.33.990,                                                                                         
11                 (1)  the applicant shall be a resident of the state as determined under (b)                             
12       of this section;                                                                                                  
13                 (2)  the applicant shall provide from a source that is not a state agency                               
14       or a public corporation of the state 20 percent of the money to be used on the project                            
15       or enterprise for which money from a loan will be used; and                                                     
16                 (3)  if the requested loan amount is $35,000 or more, the applicant shall                               
17       provide to the department a document from a state financial institution that states                               
18                      (A)  the applicant has been denied a loan for the same purpose;                                    
19            or                                                                                                           
20                      (B)  a loan from the financial institution is contingent on the                                    
21            applicant's also receiving a loan from the fund.                                                             
22            (b)  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 12 consecutive months before the date of application for the program;                            
25       and                                                                                                               
26                 (2)  may not have                                                                                       
27                      (A)  declared or established residency in another state; or                                        
28                      (B)  received residency or a benefit based on residency from                                       
29            another state in the previous 12 months.                                                                     
30            (c)  In this section, "state financial institution" means a financial institution that                       
31       has a physical location in the state from which the state financial institution does                              
01       business.                                                                                                         
02            Sec. 44.33.965. Limitations on loans. (a) The department may use money                                     
03       from the fund to make loans of up to $50,000 to one individual or loans of up to                                  
04       $100,000 to two or more individuals.                                                                              
05            (b)  A loan established under AS 44.33.950 - 44.33.990                                                       
06                 (1)  may not exceed a term of six years, except for extensions                                          
07       authorized under AS 44.33.955 or regulations adopted under AS 44.33.955;                                          
08                 (2)  may not bear interest exceeding the prime rate, as defined in                                      
09       AS 44.88.599, plus one percentage point, but interest may not be less than six percent                            
10       a year;                                                                                                           
11                 (3)  must be secured by collateral acceptable to the commissioner; and                                  
12                 (4)  may not be made to an individual who has a past due child support                                  
13       obligation established by court order or by the child support services agency under                               
14       AS 25.27.160 - 25.27.220 at the time of application.                                                              
15            Sec. 44.33.970. Special account established. (a) The foreclosure expense                                   
16       account is established as a special account in the fund.                                                          
17            (b)  The department may expend money credited to the foreclosure expense                                     
18       account when necessary to protect the state's security interest in collateral on loans                            
19       granted under AS 44.33.965 or to defray expenses incurred during foreclosure                                      
20       proceedings after a default by an obligor.                                                                        
21            Sec. 44.33.975. Disposal of property acquired by default or foreclosure.                                   
22       The department shall dispose of property acquired through default or foreclosure of a                             
23       loan made under AS 44.33.950 - 44.33.990. Disposal must be made in a manner that                                  
24       serves the best interest of the state and may include the amortization of payments over                           
25       a period of years.                                                                                                
26            Sec. 44.33.990. Definitions. In AS 44.33.950 - 44.33.990, unless the context                               
27       otherwise requires,                                                                                               
28                 (1)  "commissioner" means the commissioner of commerce,                                                 
29       community, and economic development;                                                                              
30                 (2)  "department" means the Department of Commerce, Community,                                          
31       and Economic Development;                                                                                         
01                 (3)  "fund" means the Alaska small business revolving loan fund.                                        
02    * Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to                        
03 read:                                                                                                                 
04       TRANSITION: REGULATIONS. The Department of Commerce, Community, and                                               
05 Economic Development may adopt regulations under AS 44.62 (Administrative Procedure                                     
06 Act) necessary to implement the changes made in sec. 3 of this Act. The regulations take                                
07 effect under AS 44.62 but not before July 1, 2011.                                                                      
08    * Sec. 5. Section 4 of this Act takes effect immediately under AS 01.10.070(c).                                    
09    * Sec. 6. Except as provided in sec. 5 of this Act, this Act takes effect July 1, 2011.