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SB 68: "An Act relating to the examinations, board, loans, records, and lobbying contracts of the Alaska Commercial Fishing and Agriculture Bank; and providing for an effective date."

00                             SENATE BILL NO. 68                                                                          
01 "An Act relating to the examinations, board, loans, records, and lobbying contracts of                                  
02 the Alaska Commercial Fishing and Agriculture Bank; and providing for an effective                                      
03 date."                                                                                                                  
04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
05    * Section 1. AS 44.81.020(a) is amended to read:                                                                   
06            (a)  The bank shall be governed by a board of directors consisting of seven to                               
07       nine natural persons. The number is determined by the bank's bylaws. Two board                                    
08       members shall be appointed by the governor of the state. The other board members                                  
09       shall be elected by the members of the bank as provided in the bank's bylaws [,                                   
10       EXCEPT THAT AT LEAST ONE OF THE ELECTED BOARD MEMBERS MUST                                                        
11       BE A RESIDENT FARMER].                                                                                            
12    * Sec. 2. AS 44.81.215 is amended to read:                                                                         
13            Sec. 44.81.215. Lending powers of the bank. The bank may                                                   
14                 (1)  make loans to individuals, including married couples, who are                                      
01       residents of the state and who are engaged in commercial agriculture or fishing,                                  
02       including harvesters, processors, suppliers, and marketers, if at least one of the                                
03       primary obligors on the loan is a member of the bank;                                                             
04                 (2)  make loans to corporations, partnerships, or limited liability                                     
05       companies engaged in commercial agriculture or fishing if the majority interest of the                            
06       corporation, partnership, or limited liability company is beneficially owned by                                   
07       residents of the state and a majority of the owners are residents of the state, and if at                         
08       least one of the primary obligors on a loan is a member of the bank; however, the bank                            
09       may not make a loan under this paragraph to a corporation, partnership, or limited                                
10       liability company for the purchase of a new or existing fishing boat or for the repair or                         
11       renovation of an existing fishing boat if the primary purpose of the fishing boat is to                           
12       commercially harvest fishery resources, unless the corporation, partnership, or limited                           
13       liability company is wholly owned and controlled by residents of the state, and unless                            
14       at least one of the primary obligors on the loan is a member of the bank;                                         
15                 (3)  make loans for limited entry permits to individuals who fish                                       
16       commercially if the individual is a state resident; loans made under this paragraph are                           
17       subject to AS 44.81.231;                                                                                          
18                 (4)  make loans [NOT TO EXCEED $500,000] to individuals,                                                
19       including married couples, who are residents of the state and who will use the loan                               
20       proceeds to commercially engage in tourism within the state if at least one of the                                
21       primary obligors on the loan is a member of the bank;                                                             
22                 (5)  make loans [NOT TO EXCEED $1,000,000] to corporations,                                             
23       partnerships, or limited liability companies that will use the loan proceeds to                                   
24       commercially engage in tourism within the state if the majority interest of the                                   
25       corporation, partnership, or limited liability company is beneficially owned by                                   
26       residents of the state and a majority of the owners are residents of the state, and if at                         
27       least one of the primary obligors on the loan is a member of the bank;                                            
28                 (6)  make loans [NOT TO EXCEED $500,000] to individuals,                                                
29       including married couples, who are residents of the state and who will use the loan                               
30       proceeds to commercially engage in the development or exploitation of natural                                     
31       resources within the state if at least one of the primary obligors on the loan is a                               
01       member of the bank;                                                                                               
02                 (7)  make loans [NOT TO EXCEED $1,000,000] to corporations,                                             
03       partnerships, or limited liability companies that will use the loan proceeds to                                   
04       commercially engage in the development or exploitation of natural resources within                                
05       the state if the majority interest of the corporation, partnership, or limited liability                          
06       company is beneficially owned by residents of the state and a majority of the owners                              
07       are residents of the state, and if at least one of the primary obligors on the loan is a                          
08       member of the bank;                                                                                               
09                 (8)  make a loan for capital investment or operating capital to a shore-                                
10       based fish processor, a timber processor, or an agricultural processor or harvester who                           
11       does not meet the residency or resident ownership requirements of (1) or (2) of this                          
12       section but meets the other requirements of (1) or (2) of this section, if a facility of                      
13       the processor or harvester is located in the state and the majority interest in the                               
14       processor or harvester is beneficially owned by residents of the United States;                                   
15                 (9)  make a loan to a person, regardless of residency, if the board                                     
16       determines that the loan is necessary to preserve the value of property held by the bank                          
17       as security for a loan that was made under AS 44.81.210 or this section and that is in                            
18       default;                                                                                                          
19                 (10)  make loans, as provided in (1), (2), [OR] (4) - (8), (15), or (16) of                         
20       this section, that are secured by liens subordinate to valid first liens and security                             
21       agreements granted to another creditor;                                                                           
22                 (11)  accept the pledge of a limited entry permit as security for a loan                                
23       made under this chapter subject to the conditions set out in AS 44.81.236 on pledges                              
24       of limited entry permits;                                                                                         
25                 (12)  make loans in participation with other lenders as provided in (1),                                
26       (2), [OR] (4) - (8), (15), or (16) of this section, whether or not an obligor is a member                     
27       of the bank;                                                                                                      
28                 (13)  purchase or acquire participations in loans from other lenders if                                 
29       the participations conform to the provisions of (1), (2), [OR] (4) - (8), (15), or (16) of                    
30       this section, whether or not an obligor is a member of the bank;                                                  
31                 (14)  issue certificates of loan participation to members and to other                                  
01       individuals, corporations, partnerships, and limited liability companies, but the bank                            
02       may not issue a certificate of loan participation if the certificate would allow                                  
03       participation by the member, individual, corporation, partnership, or limited liability                           
04       company in loans that individually or cumulatively involve more than 20 percent of                                
05       the commercial fishery entry permits issued for one type of gear in a specific fishery                            
06       resource administrative area;                                                                                 
07                 (15)  make a loan for capital investment or operating capital to an                                 
08       operator of tourism-related activities who does not meet the residency or resident                            
09       ownership requirements of (4) or (5) of this section but meets the other                                      
10       requirements of (4) or (5) of this section, if a facility of the operator is located in                       
11       the state and the majority interest in the operator is beneficially owned by                                  
12       residents of the United States;                                                                               
13                 (16)  make a loan for capital investment or operating capital to an                                 
14       operator of facilities dedicated to the development or exploitation of natural                                
15       resources who does not meet the residency or resident ownership requirements of                               
16       (6) or (7) of this section but meets the other requirements of (6) or (7) of this                             
17       section, if a facility of the operator is located in the state and the majority interest                      
18       in the operator is beneficially owned by residents of the United States.                                      
19    * Sec. 3. AS 44.81.260(a) is amended to read:                                                                      
20            (a)  The records of the bank that are identified with, or identifiable as being                              
21       derived from the records of, a specific borrower, member of the bank, or applicant for                            
22       a loan are confidential and may not be disclosed by the bank or by its directors,                                 
23       officers, employees, or agents to a person other than the directors, officers, employees,                         
24       or agents of the bank, except                                                                                     
25                 (1)  when required by a federal or state statute;                                                       
26                 (2)  under AS 44.81.270 and 44.81.275;                                                              
27                 (3)  under a search warrant issued under federal law or the law of this                                 
28       state;                                                                                                            
29                 (4)  under a subpoena or court order issued in a civil action under                                     
30       federal law or the law of this state;                                                                             
31                 (5)  under a subpoena or court order issued in connection with a                                        
01       proceeding before a federal grand jury or grand jury of this state;                                               
02                 (6)  under a summons or subpoena issued by an agency or a department                                    
03       of the United States or this state, or an officer, employee, or agent of the agency or                            
04       department;                                                                                                       
05                 (7)  under a request by a financial institution, if the request is solely for                           
06       the stated written purpose of determining the credit worthiness of a member or                                    
07       borrower as an applicant for credit, and if the information disclosed by the bank                                 
08       pertains only to the payment history of the member or borrower;                                                   
09                 (8)  under a request by a lender that has extended or is considering                                    
10       extending credit to the bank if the credit is or may be secured by the pledge of a loan                           
11       by the bank;                                                                                                      
12                 (9)  when disclosed to the attorney general of the United States or to a                                
13       law enforcement agency of this state if the records may be relevant to a report or                                
14       investigation of a possible violation of federal law or a law of this state.                                      
15    * Sec. 4. AS 44.81.260 is amended by adding a new subsection to read:                                              
16            (e)  Notwithstanding (a) and (b) of this section, the bank may provide a list of                             
17       the members of the bank who are eligible to serve as a director of the bank to members                            
18       of the bank who are eligible to vote for directors of the bank.                                                   
19    * Sec. 5. AS 44.81 is amended by adding a new section to read:                                                     
20            Sec. 44.81.275. Examinations. (a) At intervals that are not greater than 36                                
21       months, an examiner from the department shall perform an examination of the bank.                                 
22       Each interval shall be determined by the commissioner. During the examination, the                                
23       examiner shall evaluate the bank's loan portfolio quality on a statistical basis and on                           
24       the appropriateness and effectiveness of the bank's policies, practices, and                                      
25       management to carry out the bank's statutory purposes.                                                            
26            (b)  The examiner shall prepare a summary report of the examiner's findings                                  
27       and conclusions. The department shall distribute a copy of the report to the bank and                             
28       to the legislative auditor, but the records, information, and findings of the department                          
29       related to the examination are otherwise confidential under AS 06.01.025.                                         
30            (c)  The commissioner shall assess the bank a fee for the actual expenses                                    
31       necessarily incurred by the department in connection with an examination performed                                
01       under this section. The fee must include the proportionate part of the salaries and cost                          
02       of employee benefits of the examiners while conducting the examination and while                                  
03       preparing the summary report required by (b) of this section and the transportation                               
04       costs and per diem of each examiner while away from the examiner's duty station. The                              
05       fee may not exceed the actual cost to the department for the examination. The                                     
06       commissioner shall assess the fee as soon as feasible after the examination has been                              
07       completed. The bank shall pay the assessment within 30 days after receiving the                                   
08       commissioner's notice of the assessment.                                                                          
09            (d)  In this section,                                                                                        
10                 (1)  "commissioner" means the commissioner of commerce,                                                 
11       community, and economic development;                                                                              
12                 (2)  "department" means the Department of Commerce, Community,                                          
13       and Economic Development.                                                                                         
14    * Sec. 6. AS 44.81.350(7) and AS 44.99.030(a)(2) are repealed.                                                     
15    * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to                          
16 read:                                                                                                                   
17       EXAMINATIONS. Notwithstanding AS 44.81.275, added by sec. 5 of this Act, the                                      
18 Department of Commerce, Commerce, and Economic Development may not conduct an                                           
19 examination under AS 44.81.275, added by sec. 5 of this Act, until on or after the date that is                         
20 one year after the effective date of this Act.                                                                          
21    * Sec. 8. This Act takes effect immediately under AS 01.10.070(c).