HB 364: "An Act establishing a state bank; and providing for an effective date."
00 HOUSE BILL NO. 364 01 "An Act establishing a state bank; and providing for an effective date." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. AS 36.30.990(1) is amended to read: 04 (1) "agency" 05 (A) means a department, institution, board, commission, 06 division, authority, public corporation, the Alaska Pioneers' Home, the Alaska 07 Veterans' Home, or other administrative unit of the executive branch of state 08 government; 09 (B) does not include 10 (i) the University of Alaska; 11 (ii) the Alaska Railroad Corporation; 12 (iii) the Alaska Housing Finance Corporation; 13 (iv) a regional Native housing authority created under 14 AS 18.55.996 or a regional electrical authority created under 15 AS 18.57.020;
01 (v) the Department of Transportation and Public 02 Facilities, in regard to the repair, maintenance, and reconstruction of 03 vessels, docking facilities, and passenger and vehicle transfer facilities 04 of the Alaska marine highway system; 05 (vi) the Alaska Aerospace Corporation; 06 (vii) the Alaska Retirement Management Board; 07 (viii) the Alaska Seafood Marketing Institute; 08 (ix) the Alaska children's trust and the Alaska 09 Children's Trust Board; 10 (x) the Alaska Industrial Development and Export 11 Authority; 12 (xi) the Alaska State Bank; 13 * Sec. 2. AS 43.20.340(2) is amended to read: 14 (2) "corporation" includes an association, joint-stock company, and an 15 insurance company, but does not include the Alaska State Bank established under 16 AS 44.90; 17 * Sec. 3. AS 44 is amended by adding a new chapter to read: 18 Chapter 90. Alaska State Bank. 19 Sec. 44.90.010. Alaska State Bank. (a) The Alaska State Bank is established 20 in the department as a public corporation of the state. The exercise by the bank of the 21 powers given to the bank under this chapter is considered to be for a public purpose. 22 (b) The bank is not subject to regulation by the department under AS 06.01 or 23 AS 06.05, and the bank is exempt from AS 45.45.010 - 45.45.090 when lending 24 money under this chapter. The bank is not subject to AS 10.06 (Alaska Corporations 25 Code) or AS 10.20 (Alaska Nonprofit Corporation Act). 26 Sec. 44.90.020. Purposes of the bank. The purposes of the bank are to 27 (1) increase access to capital for new and existing businesses; 28 (2) provide stability to the financial sector in the state; 29 (3) reduce the costs paid for basic banking services; 30 (4) create long-term economic growth in the state. 31 Sec. 44.90.030. Board of directors. (a) A board of directors shall operate,
01 manage, and control the bank. 02 (b) The board consists of the governor, the commissioner of commerce, 03 community, and economic development, the commissioner of revenue, and the 04 commissioner of labor and workforce development. Three members of the board 05 constitute a quorum to transact business and exercise the rights, duties, and powers of 06 the board. 07 (c) The governor shall act as the chair of the board. 08 (d) The board shall select the president and other officers of the bank. 09 (e) The board shall operate, manage, and control the bank. The board shall 10 specify locations for and maintain places of business in which the bank will operate 11 and shall adopt and enforce bylaws and procedures for the transaction of the bank's 12 business. 13 Sec. 44.90.040. Advisory board. (a) The board shall appoint an advisory 14 board of directors. The advisory board shall consist of seven members. 15 (b) The members of the advisory board shall include representatives of the 16 financial, business, agricultural, and labor sectors of the state. 17 (c) The advisory board shall meet regularly with the management of the bank 18 to review the bank's operations and finances to determine whether the advisory board 19 has recommendations to improve management performance, customer service, and the 20 internal methods, procedures, and operating policies of the bank. 21 (d) The advisory board shall meet regularly with the board to discuss the 22 advisory board's recommendations and to provide advice, expertise, and information at 23 the request of the bank. 24 (e) At the request of the board, the advisory board shall recommend additional 25 objectives for the bank's operations. 26 (f) The advisory board shall provide advice and consultation to the board 27 regarding the appointment of bank officers. 28 (g) The advisory board shall participate on loan committees. 29 Sec. 44.90.050. Bank deposits. (a) The bank may accept deposits from private 30 customers and appropriations of money by the legislature. 31 (b) The bank shall pay interest on money received on deposits made by
01 customers of the bank at a rate that is comparable to the average statewide interest 02 rates paid by financial institutions and may offer other financial products to state 03 agencies on a competitive basis with other financial institutions. 04 Sec. 44.90.060. Powers of the bank. (a) The bank may 05 (1) make, purchase, guarantee, or hold loans 06 (A) to state and federal financial institutions, or to other 07 financial institutions; 08 (B) that are obtained as security pledged for, or originated in 09 the restructuring of, a loan that the bank originates or participated in; 10 (C) to agencies or other instrumentalities of this state; or 11 (D) that the United States or an agency of the United States 12 insures or guarantees in whole or in part; 13 (2) purchase participation interests in loans that are made or held by a 14 bank, bank holding company, lending agency, or institution that is organized under the 15 laws of this state or conducts most of its business in this state, if the loan meets 16 underwriting standards that are generally accepted by state or federal financial 17 regulatory agencies; 18 (3) invest bank funds consistent with the policies of the board; 19 (4) buy and sell federal funds; 20 (5) lease, assign, sell, exchange, transfer, convey, grant, pledge, or 21 mortgage real and personal property; 22 (6) perform the acts necessary, convenient, advisable, or desirable to 23 carry out the powers expressly granted or necessarily implied in this chapter through 24 its president, officers, agents, or employees, or by contracts with another person; 25 (7) purchase, guarantee, or hold loans originated by a financial 26 institution organized under the laws of this state or conducting most of its business in 27 this state; 28 (8) make loans in the form of participation loans to qualified persons 29 living or doing business in this state if the originator of the loan is a private financial 30 institution organized under the laws of this state or conducting the majority of its 31 business in this state;
01 (9) act as a custodian institution for financial institutions organized 02 under the laws of this state and accept deposits from the financial institutions in 03 connection with acting as a custodian; 04 (10) issue bank loans to a financial institution organized under the laws 05 of this state and doing most of its business in this state; 06 (11) take the action necessary to satisfy federal requirements for the 07 operation of the bank, including obtaining insurance for depositors from the Federal 08 Deposit Insurance Corporation; 09 (12) perform the functions and provide the services of a clearinghouse, 10 including the facilities for providing domestic and foreign exchange, and rediscount 11 commercial paper on terms prescribed by the board. 12 (b) In addition to the powers listed in (a) of this section, the bank may 13 (1) issue loans to a partnership or to form a partnership; 14 (2) make loans for large projects involving state infrastructure, natural 15 resources, industry, and technology; 16 (3) make loans to schools or for schools. 17 Sec. 44.90.070. Excess income. As soon as possible after the end of each 18 calendar year, the board shall determine the amount of income, if any, earned by the 19 bank in that calendar year that exceeds the amount of money that is necessary to pay 20 for the expenses of administering the activities of the bank. The bank shall deposit this 21 excess income in the bank fund. 22 Sec. 44.90.080. Regulations. The department shall adopt regulations under 23 AS 44.62 (Administrative Procedure Act) to 24 (1) ensure the safety and soundness of the bank, adhere to sound 25 underwriting practices, and reflect applicable standards for safety and soundness as 26 provided in 12 C.F.R. 364; 27 (2) specify the bank's powers and permissible investments and 28 activities; 29 (3) authorize specific services that the bank may provide; 30 (4) specify limits for loans and other obligations the bank makes or 31 undertakes;
01 (5) specify reserve requirements; and 02 (6) set other requirements that the board considers necessary to 03 administer the bank under this chapter. 04 Sec. 44.90.090. Examinations and audits. (a) The department shall examine 05 the bank at least once each calendar quarter to verify and ensure that the bank is 06 complying with the regulations of the board under AS 44.90.080. The department shall 07 report the results of the examination to the board. The department's report is a public 08 record subject to disclosure under AS 40.25.110 - 40.25.121. 09 (b) The bank shall have an audit of the accounts and financial affairs of the 10 bank performed by an independent auditor at least once every two years. 11 Sec. 44.90.100. Tax exemption. (a) The bank and its property, franchises, 12 capital, reserves, surpluses, other funds, and income are exempt from taxation by the 13 state or a municipality. 14 (b) All obligations issued under this chapter are declared to be issued by a 15 body corporate and public of the state and for an essential public and governmental 16 purpose, and the obligations, and the interest and income on and from the obligations, 17 and all fees, charges, funds, revenue, income, and other money pledged or available to 18 pay or secure the payment of the obligations, or interest on the obligations, are exempt 19 from taxation except for transfer, inheritance, and estate taxes. 20 Sec. 44.90.110. Civil actions. A person may bring a civil action against the 21 state for a claim that arises out of a transaction that is connected with the operation of 22 the bank. 23 Sec. 44.90.120. Use of name. (a) The bank shall conduct business under the 24 name of "Alaska State Bank." 25 (b) Within the scope of authority that the bank grants, the president of the 26 bank may execute instruments on behalf of the bank, including an instrument that 27 grants, conveys, or otherwise affects an interest in or lien on real or personal property. 28 (c) An officer or employee of the bank may execute instruments on behalf of 29 the bank if the board authorizes the officer or employee to execute the instruments on 30 behalf of the bank. 31 Sec. 44.90.130. Confidentiality of records. The following records of the bank
01 are confidential and are not public records subject to disclosure under AS 40.25.110 - 02 40.25.121: 03 (1) commercial and financial information of a customer of the bank, 04 whether obtained directly or indirectly, except as required by a court; 05 (2) internal or interagency memoranda or letters, except as required by 06 a court; 07 (3) except as provided in AS 44.90.090, information that is contained 08 in or related to a report of an examination or operating or condition reports prepared 09 by, on behalf of, or for the use of a state or federal agency responsible for regulating or 10 supervising activities of the bank. 11 Sec. 44.90.140. Procurement. The bank is not subject to the procurement 12 requirements of AS 36.30 when the bank procures services or property for use by the 13 bank. 14 Sec. 44.90.150. Alaska state bank fund. (a) The Alaska state bank fund is 15 established in the general fund. The fund consists of money appropriated to the bank 16 fund by the legislature for the bank fund, interest received by the bank, and income 17 received by the bank, including the excess income calculated under AS 44.99.040. 18 (b) The bank may spend the money appropriated to the bank fund to 19 implement the provisions of this chapter without further appropriation. Appropriations 20 to the bank fund do not lapse under AS 37.25.010, but remain in the bank fund for 21 future disbursements. 22 (c) The legislature may appropriate to the bank fund the income and interest 23 received by the bank. 24 (d) Nothing in this section creates a dedicated fund. 25 Sec. 44.90.990. Definitions. In this chapter, unless the context indicates 26 otherwise, 27 (1) "bank" means the Alaska State Bank established under 28 AS 44.90.010; 29 (2) "bank fund" means the Alaska state bank fund established under 30 AS 44.90.150; 31 (3) "board" means the board of directors of the Alaska State Bank;
01 (4) "customer" means a person that has transacted or is transacting 02 business with the bank, that has used or is using the services of the bank, or for whom 03 the bank has acted or is acting as a fiduciary with respect to trust property; 04 (5) "department" means the Department of Commerce, Community, 05 and Economic Development. 06 * Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to 07 read: 08 TRANSITION: REGULATIONS. The Department of Commerce, Community, and 09 Economic Development may adopt regulations under AS 44.90.080 necessary to implement 10 this Act. The regulations take effect under AS 44.62 (Administrative Procedure Act), but not 11 before July 1, 2017. 12 * Sec. 5. Section 4 of this Act takes effect immediately under AS 01.10.070(c). 13 * Sec. 6. Except as provided in sec. 5 of this Act, this Act takes effect July 1, 2017.