00 SENATE BILL NO. 96 01 "An Act relating to loans for the purchase of individual fishery quota shares; 02 and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 16.10.310(a) is amended to read: 05  (a) The department may 06  (1) make loans [TO] 07  (A) to individual commercial fishermen who have been state 08 residents for a continuous period of two years immediately preceding the date 09 of application for a loan under AS 16.10.300 - 16.10.370 and have had a 10 crewmember or commercial fishing license under AS 16.05.480 or a permit 11 under AS 16.43 for the year immediately preceding the date of application and 12 any other two of the past five years, and who actively participated in the 13 fishery during those periods, for the purchase of entry permits; 14  (B) to an individual for the repair, restoration, or upgrading of 01 existing vessels and gear, for the purchase of entry permits and gear, and for 02 the construction and purchase of vessels, if the individual has been a state 03 resident for a continuous period of two years immediately preceding the date 04 of application for a loan under AS 16.10.300 - 16.10.370, and either 05  (i) because of lack of training or lack of employment 06 opportunities in the area of residence does not have occupational 07 opportunities available other than commercial fishing; or 08  (ii) is economically dependent on commercial fishing for 09 a livelihood and for whom commercial fishing has been a traditional 10 way of life in Alaska; 11  (C) for the purchase of individual fishery quota shares in a 12 fishery occurring in or adjacent to the state by individual commercial 13 fishermen who 14  (i) have been state residents for a continuous period 15 of two years immediately preceding the date of application for a 16 loan under AS 16.10.300 - 16.10.370; 17  (ii) had a crewmember or commercial fishing license 18 under AS 16.05.480 or a permit under AS 16.43 for the year 19 immediately preceding the date of application and any other two of 20 the past five years; 21  (iii) have actively participated, as defined by the 22 department, in the fishery for which the individual fishery quota 23 shares are issued during three of the last five years; and 24  (iv) qualify as a transferee for individual fishery 25 quota shares under applicable law; 26  (2) designate agents and delegate its powers to them as necessary; 27  (3) adopt regulations necessary to carry out the provisions of 28 AS 16.10.300 - 16.10.370, including regulations to establish reasonable fees for 29 services provided; 30  (4) establish amortization plans for repayment of loans, which may 31 include extensions for poor fishing seasons or for adverse market conditions for 01 Alaskan products; 02  (5) enter into agreements with private lending institutions, other state 03 agencies, or agencies of the federal government, to carry out the purposes of 04 AS 16.10.300 - 16.10.370; 05  (6) enter into agreements with other agencies or organizations to create 06 an outreach program to make loans under AS 16.10.300 - 16.10.370 in rural areas of 07 the state; 08  (7) allow an assumption of a loan if 09  (A) the applicant has been a state resident for a continuous 10 period of two years immediately preceding the date of the request for an 11 assumption; and 12  (B) approval of the assumption would be consistent with the 13 purposes of AS 16.10.300; an applicant for a loan assumption may not be 14 disqualified because the applicant does not meet the loan eligibility 15 requirements of (1) of this subsection; 16  (8) prequalify loan applicants for a limited entry permit loan or an 17 individual fishery quota shares loan and charge a fee not to exceed $200 for 18 prequalification; 19  (9) charge and collect the fees established under this subsection. 20 * Sec. 2. AS 16.10.320(i) is amended to read: 21  (i) If a loan is made to a borrower under AS 16.10.310(a)(1)(A), a subsequent 22 loan may not be made to the borrower under AS 16.10.310(a)(1)(B). If a loan is made 23 to a borrower under AS 16.10.310(a)(1)(B), a subsequent loan may be made to the 24 borrower under AS 16.10.310(a)(1)(A) if the total of the balance outstanding on loans 25 received by the borrower under AS 16.10.310(a)(1)(A) and (B) [AS 16.10.310] does 26 not exceed $300,000. 27 * Sec. 3. AS 16.10.325 is amended to read: 28  Sec. 16.10.325. GUARANTORS. A person may act as guarantor if the 29 borrower has insufficient collateral to secure a loan for the purposes described in 30 AS 16.10.310(a)(1)(B) or (C). The loan agreement shall specifically describe the 31 property of the guarantor to be used as collateral by the borrower and shall be signed 01 by the guarantor and the borrower. The department shall provide the guarantor with 02 a copy of all notices sent to the borrower by the department. If the loan is for the 03 purchase of an entry permit or individual fishery quota shares, the guaranty by the 04 guarantor may not constitute a lien, mortgage, or encumbrance on or pledge of the 05 entry permit or individual fishery quota shares. 06 * Sec. 4. AS 16.10.338 is amended by adding a new subsection to read: 07  (c) If a limited entry permit is pledged for security for a loan made under 08 AS 16.10.310(a)(1)(C) for the purchase of individual fishery quota shares and the 09 borrower thereafter fails to make a payment or defaults, the commissioner shall, in 10 addition to the notice provided under AS 16.10.335(a), notify the borrower that subject 11 to the commissioner's acceptance the borrower may sell the individual fishery quota 12 shares, apply the sales proceeds to the debt, and renegotiate payment of the balance 13 due on the loan to avoid the immediate loss of the limited entry permit that has been 14 pledged for security for the loan. 15 * Sec. 5. AS 16.10.360 is amended by adding a new paragraph to read: 16  (5) "individual fishery quota share" means a transferrable license, 17 permit, or right issued by the federal government that conveys a right to engage in a 18 fishery in or off Alaska and to take a specified portion of the annual harvest quota for 19 that fishery. 20 * Sec. 6. This Act takes effect immediately under AS 01.10.070(c).