CSHB 284(FIN): "An Act relating to the Alaska Commercial Fishing and Agriculture Bank."
00CS FOR HOUSE BILL NO. 284(FIN) 01 "An Act relating to the Alaska Commercial Fishing and Agriculture Bank." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. AS 16.43.150(g) is amended to read: 04 (g) Except as provided in AS 16.10.333 - 16.10.338, AS 44.81.215 05 [AS 44.81.210], 44.81.225, and 44.81.231 - 44.81.250 [44.81.230 - 44.81.250], an 06 entry permit may not be 07 (1) pledged, mortgaged, leased, or encumbered in any way; 08 (2) transferred with any retained right of repossession or foreclosure, 09 or on any condition requiring a subsequent transfer; or 10 (3) attached, distrained, or sold on execution of judgment or under any 11 other process or order of any court, except as provided in AS 16.43.170(g) and (h). 12 * Sec. 2. AS 16.43.150(h) is amended to read: 13 (h) Unless an entry permit holder has expressed a contrary intent in a will that 14 is probated, the commission shall, upon the death of the permit holder, transfer the
01 permanent permit by right of survivorship directly to the surviving spouse or, if no 02 spouse survives, to a natural person designated by the permit holder on a form 03 provided by the commission. If no spouse survives and if the person designated on 04 the form, if any, does not survive, the permit passes as part of the permit holder's 05 estate. A designation under this subsection must be acknowledged before a person 06 authorized to administer an oath under AS 09.63.010 or must be witnessed by two 07 persons who are qualified under AS 13.11.170 to witness the will of the permit holder. 08 Except as provided in AS 16.10.333 - 16.10.337, AS 44.81.215 [AS 44.81.210], and 09 44.81.231 - 44.81.250 [44.81.230 - 44.81.250], the permit is exempt from the claims 10 of creditors of the estate. 11 * Sec. 3. AS 16.43.170(a) is amended to read: 12 (a) Except as provided in AS 16.10.333 - 16.10.338 and in AS 44.81.231 - 13 44.81.250 [AS 44.81.230 - 44.81.250], entry permits and interim-use permits are 14 transferable only through the commission as provided in this section and AS 16.43.180 15 and under regulations adopted by the commission. An involuntary transfer of an entry 16 permit in a manner inconsistent with the statutes of this state and the regulations of the 17 commission is void. 18 * Sec. 4. AS 16.43.170(b) is amended to read: 19 (b) Except as provided in (c) and (e) of this section, the holder of an entry 20 permit may transfer the permit to another person or to the commission upon 60 days 21 notice of intent to transfer under regulations adopted by the commission. No sooner 22 than 60 days nor later than 12 months from the date of notice to the commission, the 23 holder of an entry permit may transfer the permit. If the proposed transferee, other 24 than the commission, can demonstrate the present ability to participate actively in the 25 fishery and the transfer does not violate any provision of this chapter or regulations 26 adopted under it, and if a certificate for the permit under AS 16.10.333(b)(1) - (2), 27 16.10.338, or AS 44.81.231(a) [AS 44.81.230(b)(1) - (2)] is not in effect, the 28 commission shall approve the transfer and reissue the entry permit to the transferee 29 provided that neither party is prohibited by law from participating in the transfer. 30 * Sec. 5. AS 16.43.170(g) is amended to read: 31 (g) A person may request the commission to transfer an entry permit due to
01 an execution on the holder's interest in that permit. The request shall be made in the 02 form and manner provided in this chapter and regulations adopted under this chapter. 03 The commission may deny a request for transfer of an entry permit due to an 04 execution of a holder's interest in that permit if 05 (1) the execution does not comply with legal requirements or otherwise 06 is not valid; 07 (2) the transfer violates this chapter or regulations adopted under this 08 chapter; 09 (3) the proposed transferee or other party to the transfer is prohibited 10 by law from participating in the transaction; 11 (4) a certificate for the permit under AS 16.10.333(b)(1) - (2), 12 16.10.338, or AS 44.81.231(a) [AS 44.81.230(b)(1) - (2)] is in effect at the time of 13 the proposed transfer; 14 (5) the proposed transferee of the entry permit, other than the 15 commission, cannot demonstrate the present ability to actively participate in the 16 fishery; or 17 (6) the holder of the entry permit as shown by the records of the 18 commission demonstrates, under regulations adopted by the commission, that the entry 19 permit is a necessary means of support for the holder and those dependent upon the 20 holder. 21 * Sec. 6. AS 16.43.960(i) is amended to read: 22 (i) An entry permit revoked by the commission under this section that is 23 pledged as security for a loan under AS 16.10.333 or AS 44.81.231 [AS 44.81.230] 24 shall be reassigned or sold as provided in AS 16.10.337 or AS 44.81.250. 25 * Sec. 7. AS 16.43.970(f) is amended to read: 26 (f) An entry permit forfeited under this section that is taken as security for a 27 loan under AS 16.10.333 or AS 44.81.231 [AS 44.81.230] shall be reassigned as 28 provided in AS 16.10.337 or AS 44.81.250. 29 * Sec. 8. AS 44.81.010(a) is amended to read: 30 (a) There is established the Alaska Commercial Fishing and Agriculture Bank. 31 The exercise by the bank of the powers conferred by this chapter is considered to be
01 for a public purpose. The bank is exempt from the provisions of AS 06.05 (Alaska 02 Banking Code) and AS 10.15 (Alaska Cooperative Corporation Act) in its structure 03 and operations and in the exercise of powers granted by this chapter. 04 * Sec. 9. AS 44.81.010(b) is amended to read: 05 (b) For the purpose of acquiring and accumulating capital [THE FUNDING] 06 of the bank [BANK'S OPERATIONS], the board [OF DIRECTORS] may issue 07 nonvoting, preferred shares of stock in the bank and determine the value of each share. 08 The state, through the Department of Revenue [APPROPRIATE AGENCIES], may 09 purchase the nonvoting, preferred shares issued by the bank. If the cumulative value 10 of the shares [SHARES] purchased by the state exceeds $1,000,000, the shares 11 representing the excess shall be repurchased by the bank within 20 years after their 12 purchase. If the bank fails to repurchase the shares representing the excess within 13 20 years after their purchase by the state, the commissioner of commerce and 14 economic development may appoint a receiver to direct, manage, and operate 15 [DISSOLVE] the bank until the shares representing the excess have been 16 repurchased. Upon voluntary or involuntary liquidation of the bank, and upon 17 repayment of all legal debts and obligations of the bank, all shares of nonvoting, 18 preferred stock owned by the state have priority for redemption over all other 19 forms and amounts of ownership of the bank. 20 * Sec. 10. AS 44.81.020 is repealed and reenacted to read: 21 Sec. 44.81.020. BOARD OF DIRECTORS. (a) The bank shall be governed 22 by a board of directors consisting of seven to nine natural persons. The number is 23 determined by the bank's bylaws. Two board members shall be appointed by the 24 governor of the state. The other board members shall be elected by the members of 25 the bank as provided in the bank's bylaws, except that at least one of the elected board 26 members must be a resident farmer. 27 (b) The members of the board shall serve for terms of three years and may 28 serve successive terms. Terms must be staggered. A member of the board who 29 releases confidential information in violation of AS 44.81.260, commits serious ethical 30 misconduct that relates to the member's fitness to serve as a member of the board, or 31 maintains a chronically and irredeemably substandard borrowing relationship with the
01 bank may be removed from the board by affirmative vote of a majority of the 02 members of the board. 03 (c) A majority of the members of the board constitutes a quorum for the 04 transaction of business and the exercise of the powers and duties of the board. 05 (d) A member of the board may not vote on a transaction of the bank under 06 this chapter if the member is a party to the transaction. 07 (e) The members of the board shall annually elect from among themselves a 08 chair and vice-chair and other board officers as may be provided in the bank's bylaws. 09 (f) Members of the board shall receive compensation not to exceed $250 for 10 each day of a board meeting if they attend the meeting. Directors may also receive 11 compensation for personal time and efforts expended to further the bank's interests or 12 business other than on meeting days as may be determined by the chair under the 13 bank's bylaws. 14 * Sec. 11. AS 44.81 is amended by adding a new section to read: 15 Sec. 44.81.031. OFFICERS AND EMPLOYEES. (a) The board shall employ 16 a president. The president may not be a member of the board and serves at the 17 pleasure of the board. The president is the chief executive officer of the bank. 18 (b) The board shall appoint those officers of the bank that are provided for in 19 the bank's bylaws and as the board determines to be necessary for the effective 20 operations of the bank. An executive, operating, administrative, or other salaried 21 officer of the bank may not be a member of the board. 22 (c) The president may hire employees of the bank as may be determined 23 necessary for the efficient performance of the functions of the bank. The board shall 24 approve the compensation of the employees. Employees of the bank are not 25 employees of the state and are not considered to be employees of a public organization 26 for the purposes of AS 39.35. 27 * Sec. 12. AS 44.81 is amended by adding a new section to read: 28 Sec. 44.81.041. STRUCTURE AND MEMBERSHIP OF THE BANK. (a) 29 The bank shall be structured and operated as a cooperative corporation. 30 (b) The board shall issue shares of membership stock in the bank in the 31 amounts and with the value determined by the board and stated in the articles of
01 incorporation. The membership stock may be issued under this chapter and under the 02 bylaws of the bank to persons determined to be eligible to transact business with the 03 bank. 04 (c) The board may establish one or more mechanisms by which persons or 05 entities, or classes of persons or entities, who transact business with the bank are 06 required to provide or establish capital ownership in the bank. The mechanisms may 07 include the issuance of capital stock or other equity instruments or the allocation or 08 retention of net proceeds from the operations of the bank. The mechanisms shall be 09 established and imposed in a manner that the board determines equitably reflects the 10 nature and amount of business transacted with the bank. 11 * Sec. 13. AS 44.81 is amended by adding a new section to read: 12 Sec. 44.81.051. BYLAWS. The board may adopt bylaws for the bank for the 13 regulation and management of the affairs of the bank, and may alter, amend, or repeal 14 them. The bylaws shall be consistent with this chapter and other laws that apply to 15 the bank. 16 * Sec. 14. AS 44.81 is amended by adding a new section to read: 17 Sec. 44.81.061. INDEMNIFICATION OF DIRECTORS, OFFICERS, AND 18 EMPLOYEES. The bank may indemnify directors, officers, and employees, or may 19 purchase and maintain insurance on behalf of directors, officers, and employees. The 20 indemnification and the insurance purchase and maintenance shall comply with 21 AS 10.06.490. 22 * Sec. 15. AS 44.81 is amended by adding a new section to read: 23 Sec. 44.81.101. PLEDGE OF THE STATE. (a) The state pledges to and 24 agrees with any lender to the bank that the state will not limit or alter the rights and 25 powers given to the bank by this chapter to fulfill the terms of a contract made by the 26 bank with the lender to the bank, or in any way impair the rights and remedies of the 27 lender to the bank. The bank is authorized to include this pledge and agreement of the 28 state in a contract with any lender to the bank. 29 (b) The pledge of the state is limited to the express provisions of (a) of this 30 section and is not a guarantee, surety, promise, undertaking, or assurance of repayment 31 or performance of any obligation of the bank.
01 * Sec. 16. AS 44.81.200 is amended to read: 02 Sec. 44.81.200. REPORTS AND PUBLICATIONS. The board [OF 03 DIRECTORS] shall publish an annual report to the bank's members. The report shall 04 be made available to the governor, the legislature, and the public. The report 05 [AND] must include financial statements audited by independent outside auditors, a 06 discussion [STATEMENT] of the bank's circumstances and operations 07 [INVESTMENTS, A DESCRIPTION OF THE BANK'S LOAN ACTIVITY] during 08 the period covered by the report [, AN ANALYSIS OF ECONOMIC AND OTHER 09 EFFECTS OF LOAN DECISIONS ON THE STATE'S COMMERCIAL FISHING 10 AND AGRICULTURE INDUSTRIES], and any other information that the board 11 believes would be of interest to the governor, the legislature, and the public, or that 12 the legislature requests the board to include. The board may [ALSO] publish other 13 reports considered appropriate [IT CONSIDERS DESIRABLE] to [CARRY OUT] 14 its purposes. 15 * Sec. 17. AS 44.81.210 is repealed and reenacted to read: 16 Sec. 44.81.210. GENERAL POWERS OF THE BANK. The bank may 17 (1) adopt, alter, and use a corporate seal; 18 (2) sue and be sued in the name of the bank; 19 (3) appoint officers, employees, trustees for certificate holders, and 20 agents, and establish their powers and duties; 21 (4) provide technical services to members of the bank; in this 22 paragraph, "technical services" includes services that will enhance the ability of a 23 member to obtain financial assistance from the bank; 24 (5) participate with state departments and agencies in formulating 25 policy and in planning for the development of commercial fishing and agriculture in 26 the state; 27 (6) engage in programs to support the efforts of resident fishers or 28 farmers in order to enhance the further development, efficiency, stability, or 29 profitability of commercial fishing or agriculture in the state; 30 (7) make contracts and execute instruments necessary to or convenient 31 for the exercise of its corporate powers;
01 (8) issue bonds to carry out its corporate purposes and powers; 02 (9) borrow money and issue secured and unsecured evidence of 03 indebtedness for a corporate purpose or to fund, refund, pay, or discharge outstanding 04 obligations, and enter into agreements and contracts relating to these obligations; 05 (10) secure the payment of its obligations by pledge, mortgage, or other 06 lien on its contracts, revenue, income, or property; 07 (11) incur secondary liability by guaranty or endorsement of the 08 obligations of a person, except for natural persons, when, in the judgment of the board, 09 the action furthers the bank's corporate purposes; 10 (12) acquire real or personal property by purchase, lease, bequest, 11 devise, gift, the satisfaction of debts, or the foreclosure of mortgages, and hold, 12 maintain, use, operate, and convey real or personal property; 13 (13) sell, lease as lessor or lessee, exchange, donate, convey, or 14 encumber in any manner by mortgage or by creation of another security interest, real 15 or personal property owned by it, or in which it has an interest, when, in the judgment 16 of the board, the action furthers its corporate purposes; 17 (14) establish wholly-owned or majority-owned subsidiary corporations 18 or limited liability companies to acquire, hold, operate, maintain, or liquidate property 19 received by the bank in a foreclosure action or other loan collection process or to 20 provide services to resident fishers or farmers, or other persons, if the services are 21 consistent with the corporate purposes and powers expressed in this chapter; 22 (15) acquire equity or other ownership interest in a domestic 23 corporation or limited liability company if the purpose of the acquisition is to enhance 24 the further development, efficiency, stability, or profitability of commercial fishing or 25 agriculture in the state; 26 (16) enter into agreements with public or private lenders or other 27 entities, or with state agencies or agencies of the federal government, to carry out the 28 purposes of this chapter; 29 (17) do what is necessary or desirable to carry out the corporate 30 purposes and powers expressed or implied in this chapter. 31 * Sec. 18. AS 44.81 is amended by adding a new section to read:
01 Sec. 44.81.215. LENDING POWERS OF THE BANK. The bank may 02 (1) make loans to individuals, including married couples, who are 03 residents of the state and who are engaged in commercial agriculture or fishing, 04 including harvesters, processors, suppliers, and marketers, if at least one of the primary 05 obligors on the loan is a member of the bank; 06 (2) make loans to corporations, partnerships, or limited liability 07 companies engaged in commercial agriculture or fishing if the majority interest of the 08 corporation, partnership, or limited liability company is beneficially owned by residents 09 of the state and a majority of the owners are residents of the state, and if at least one 10 of the primary obligors on a loan is a member of the bank; however, the bank may not 11 make a loan under this paragraph to a corporation, partnership, or limited liability 12 company for the purchase of a new or existing fishing boat or for the repair or 13 renovation of an existing fishing boat if the primary purpose of the fishing boat is to 14 commercially harvest fishery resources, unless the corporation, partnership, or limited 15 liability company is wholly owned and controlled by residents of the state, and unless 16 at least one of the primary obligors on the loan is a member of the bank; 17 (3) make loans for limited entry permits to individuals who fish 18 commercially if the individual is a state resident; loans made under this paragraph are 19 subject to AS 44.81.231; 20 (4) make a loan for capital investment or operating capital to a 21 shore-based fish processor, a timber processor, or an agricultural processor or harvester 22 who does not meet the resident ownership requirements of (1) or (2) of this section if 23 a facility of the processor or harvester is located in the state and the majority interest 24 in the processor or harvester is beneficially owned by residents of the United States; 25 (5) make a loan to a person, regardless of residency, if the board 26 determines that the loan is necessary to preserve the value of property held by the bank 27 as security for a loan that was made under AS 44.81.210 or this section and that is in 28 default; 29 (6) make loans, as provided in (1), (2), or (4) of this section, that are 30 secured by liens subordinate to valid first liens and security agreements granted to 31 another creditor;
01 (7) accept the pledge of a limited entry permit as security for a loan 02 made under this chapter subject to the conditions set out in AS 44.81.236 on pledges 03 of limited entry permits; 04 (8) make loans in participation with other lenders as provided in (1), 05 (2), or (4) of this section, whether or not an obligor is a member of the bank; 06 (9) purchase or acquire participations in loans from other lenders if the 07 participations conform to the provisions of (1), (2), or (4) of this section, whether or 08 not an obligor is a member of the bank; 09 (10) issue certificates of loan participation to members and to other 10 individuals, corporations, partnerships, and limited liability companies, but the bank 11 may not issue a certificate of loan participation if the certificate would allow 12 participation by the member, individual, corporation, partnership, or limited liability 13 company in loans that individually or cumulatively involve more than 20 percent of 14 the commercial fishery entry permits issued for one type of gear in a specific fishery 15 resource administrative area. 16 * Sec. 19. AS 44.81 is amended by adding a new section to read: 17 Sec. 44.81.231. PLEDGE OF PERMITS. (a) A limited entry permit issued 18 under AS 16.43 may be pledged by the holder as security for a loan authorized under 19 AS 44.81.236 if the certificate for the pledged permit lists the bank as the legal owner 20 of the permit and the pledger as the equitable owner of the permit. 21 (b) Annual permit cards issued under the pledged permit must be in the name 22 of the equitable owner who shall be responsible for compliance with the laws that 23 govern the permit as if the equitable owner were the holder of the permit. 24 (c) Co-borrowers or guarantors on a loan secured by one or more pledged 25 permits do not have a right in the pledged permit of the equitable owner, whether by 26 subrogation or other manner. 27 (d) Upon payment of the loan, the bank shall certify to the Commercial 28 Fisheries Entry Commission that the loan has been repaid, and the commission shall 29 amend the permit certificate to list the equitable owner as the holder, and the legal 30 interest of the bank shall terminate. 31 (e) In anticipation of a possible foreclosure under AS 44.81.241 - 44.81.250,
01 the equitable owner of a permit that is pledged as security for the loan may nominate 02 a person to whom the permit may be transferred if the pledge is foreclosed under 03 AS 44.81.245. 04 * Sec. 20. AS 44.81 is amended by adding a new section to read: 05 Sec. 44.81.236. LIMITATIONS ON THE PLEDGE OF PERMITS. A loan 06 may not be secured by the pledge of a limited entry permit unless the proceeds of the 07 loan are used for 08 (1) the purchase of a permit; 09 (2) the purchase or lease of quota shares, individual fishing quotas, or 10 another license, permit, or other grant of commercial fisheries harvesting entitlements 11 that is issued and regulated under state or federal law; 12 (3) the purchase, construction, maintenance, repair, or improvement of 13 commercial fishing boats, sites, gear, or equipment; 14 (4) working capital, including insurance premiums, supplies, food, fuel, 15 bait, boat storage, and boat launching; 16 (5) the purchase of the bank's stock or other equity instruments and 17 loan costs; or 18 (6) refinancing of debts incurred for a purpose listed in (1) - (5) of this 19 section. 20 * Sec. 21. AS 44.81 is amended by adding new sections to read: 21 Sec. 44.81.241. INITIAL NOTICE OF DEFAULT. If there is a default on a 22 loan secured by a permit pledged under AS 44.81.231, the bank shall notify the 23 borrowers and guarantors on the loan of the default and of the right to cure the default 24 by sending a notice by certified mail to their last known address or addresses on file 25 with the bank. The notice must include 26 (1) the date of the notice; 27 (2) a description of the security given for the loan, including the 28 number assigned by the commission and the name of the equitable owner of each 29 permit pledged to secure the loan; 30 (3) the date and nature of the default; 31 (4) the amount of arrearages as of the date of the notice;
01 (5) the total indebtedness, including interest, penalties, and costs of 02 collection, remaining owing on the loan as of the date of the notice; 03 (6) the amount of daily interest to accrue from the date of the notice; 04 (7) a statement that the costs of collection of the loan incurred by the 05 bank after the date of the notice will be added to the total amount of the indebtedness 06 owing on the loan; 07 (8) a statement that the default may be cured within 60 days from the 08 date of the notice or within an extended time period that is specified in an extension 09 notice provided by the bank within the 60-day period under AS 44.81.249; 10 (9) the place where payment of arrearages or other cure may be made; 11 and 12 (10) a statement in at least 10 point bold type stating: 13 "IMPORTANT: UNLESS YOU CURE THE LOAN DEFAULT 14 WITHIN THE TIME SPECIFIED BY THIS NOTICE, THE TOTAL 15 INDEBTEDNESS OWING ON THE LOAN SHALL BE 16 IMMEDIATELY DUE AND PAYABLE TO THE BANK WITHOUT 17 FURTHER NOTICE TO YOU. ALSO, THE BANK SHALL THEN 18 BE ENTITLED TO TAKE ANY LEGAL ACTION AGAINST YOU 19 TO COLLECT THE LOAN, INCLUDING THE INSTITUTION OF 20 LAWSUITS AND THE FORECLOSURE OF THE PLEDGE OF ANY 21 PERMIT PLEDGED TO SECURE THIS LOAN." 22 Sec. 44.81.243. BANK REMEDIES AFTER FAILURE TO CURE. If the 23 borrowers and guarantors on a loan secured by a permit pledged under AS 44.81.231 24 fail to cure a default within the time stated in the notice given under AS 44.81.241, 25 the total indebtedness owing on the loan immediately becomes due and payable to the 26 bank, and the bank shall be entitled to take any legal action to collect the loan, 27 including the foreclosure under AS 44.81.245 of the permit pledge that secures the 28 loan and the institution of legal action. If the bank forecloses the permit pledge, the 29 bank may proceed in the order the bank selects, whether before, after, or concurrent 30 with other action taken to collect the loan. 31 Sec. 44.81.245. FORECLOSURE NOTICE. The bank may foreclose on a
01 permit pledge that secures a loan by sending to the equitable owner of the permit 02 pledged and any other borrowers and guarantors on the loan a notice of foreclosure. 03 The notice shall be sent by certified mail to their last known address or addresses on 04 file with the bank and must include 05 (1) the date of the notice; 06 (2) a statement that the total indebtedness owing on the loan became 07 due and payable to the bank because the loan default was not cured within the time 08 specified in the notice of default and right to cure provided under AS 44.81.241, and 09 that as a result the bank is entitled to take legal action to collect the loan, including 10 the forfeiture of a permit pledge that secures the loan and the institution of legal 11 action; 12 (3) a description of the permit pledge that is being foreclosed by the 13 notice, including an identification of the permit by the number assigned by the 14 commission and the name of the equitable owner; 15 (4) the amount of the total indebtedness owing as of the date of the 16 notice; 17 (5) the amount of daily interest that accrues from the date of the notice; 18 (6) a statement that the costs of collection of the loan incurred by the 19 bank after the date of the notice will be added to the total amount of the indebtedness 20 due on the loan; 21 (7) a statement that to avoid forfeiture of all rights of the equitable 22 owner of the permit identified in the notice, the loan must be paid in full within 60 23 days from the date of the notice or within an extended time period that is specified in 24 an extension notice provided by the bank within the 60-day period under 25 AS 44.81.249; 26 (8) a statement that once a forfeiture of all rights of the equitable owner 27 of a permit described in the notice occurs, the permit may not be redeemed; 28 (9) a statement of the right of the equitable owner to nominate a person 29 to assume the loan under AS 44.81.245; 30 (10) the place where payment in full may be made; and 31 (11) a notice in at least 10 point bold type stating:
01 "IMPORTANT: IF THE LOAN IS NOT PAID IN FULL BY THE 02 DATE SPECIFIED, ALL RIGHTS OF THE EQUITABLE OWNER TO 03 THE PERMIT IDENTIFIED IN THIS NOTICE WILL BE FORFEITED 04 WITHOUT FURTHER NOTICE TO YOU. IN THAT EVENT, 05 THERE WILL NOT BE A RIGHT OF REDEMPTION OF THE 06 PERMIT. IN ADDITION, THE BANK MAY NOW TAKE OTHER 07 ACTION TO COLLECT THE LOAN, INCLUDING THE 08 INSTITUTION OF LEGAL ACTION AGAINST YOU AND THE 09 FORECLOSURE OF OTHER PERMIT PLEDGES THAT SECURE 10 THE LOAN." 11 Sec. 44.81.247. TERMINATION OF PERMIT INTEREST. If a loan is not 12 paid in full within the time specified by the notice provided for the loan under 13 AS 44.81.245, the equitable interest in the permit identified in the notice terminates 14 by operation of law without further notice. The commission shall cancel an entry 15 permit card issued to the equitable owner of the permit immediately upon receipt by 16 the commission of a certificate of termination containing a copy of the notices required 17 by AS 44.81.241 and 44.81.245. 18 Sec. 44.81.249. CANCELLATION, EXTENSION, AND DELIVERY OF 19 NOTICES. (a) The bank may cancel a notice provided under AS 44.81.241 or 20 44.81.245 by delivering a written notice of cancellation to the persons who were given 21 the cancelled notice. The notice shall be given in the same manner as is required for 22 the cancelled notice. 23 (b) The bank may extend the 60-day period for curing a default under 24 AS 44.81.243 and the period before a forfeiture occurs under AS 44.81.247 by giving 25 a written notice of extension to the persons who were given the notice. The notice 26 shall be given in the same manner as is required for the giving of the notice being 27 extended. 28 (c) The bank may give a notice required to be provided in AS 44.81.241, 29 44.81.245, or 44.81.247 by personal delivery instead of by certified mail. 30 * Sec. 22. AS 44.81.250 is repealed and reenacted to read: 31 Sec. 44.81.250. TRANSFER OF ENTRY PERMITS AFTER FORECLOSURE.
01 (a) Upon foreclosure of a pledge of an entry permit under AS 44.81.241 - 44.81.249, 02 the bank shall determine if the permit is subject to a buy-back program under 03 AS 16.43.290 - 16.43.330 and, if it is subject to a buy-back program, shall offer the 04 permit to the commission at a price equal to the outstanding indebtedness on the loan. 05 (b) If the permit is not subject to a buy-back program, or if the commission 06 fails to buy back the permit within 30 days after the commission receives the offer, the 07 bank shall sell the permit to a person who qualifies as a transferee of an entry permit 08 under AS 16.43 and the regulations adopted by the commission. The bank shall give 09 preference to an offer to purchase a permit made by a state resident if the price offered 10 is equal to or greater than the price offered by a nonresident. If the proceeds of the 11 sale of a permit exceed the amount necessary to pay the indebtedness in full, the bank 12 shall remit the excess to the borrower. 13 (c) At any time before foreclosure of a pledge of a permit, or within 30 days 14 following foreclosure of a pledge of a permit, the equitable owner or former equitable 15 owner may nominate a person to assume the loan. A person nominated must qualify 16 as a transferee of the permit under AS 16.43 and must qualify to assume the loan 17 under the requirements of the bank. If the person qualifies, the permit shall be 18 transferred to the nominee upon the nominee's assumption of the loan. 19 (d) This section does not affect the right of the bank to institute legal actions 20 against the borrowers, guarantors, or other sureties for performance to collect the 21 indebtedness owing on the loan and to take other legal action on the collateral securing 22 the loan. 23 * Sec. 23. AS 44.81.270 is repealed and reenacted to read: 24 Sec. 44.81.270. AUDITS AND EXAMINATIONS OF BANK. (a) The 25 legislative auditor may cause the bank to be audited in the manner and under the 26 conditions established by AS 24.20.271 for audits performed by the legislative audit 27 division. The legislative audit division has free access to all books and papers of the 28 bank that relate to the business of the bank and books and papers kept by a director, 29 officer, or employee relating to or upon which a record of the business of the bank is 30 kept. The legislative audit division may summon witnesses and administer oaths or 31 affirmations in the examination of directors, officers, or employees of the bank or
01 another person in relation to the affairs, transactions, and conditions of the bank, and 02 may require and compel the production of records, books, papers, contracts, or other 03 documents by court order if not voluntarily produced. At the direction of the legislative 04 budget and audit committee under AS 24.20.271, the legislative auditor may conduct 05 an audit of the bank. 06 (b) The legislative auditor and the auditor's employees may not disclose 07 information acquired by them in the course of an audit of the bank concerning the 08 particulars of the business or affairs of a borrower of the bank or another person, 09 unless the information is required to be disclosed by law or under a court order. 10 (c) The bank shall be audited annually by independent outside auditors. The 11 legislative auditor may confer with the outside auditors and review the work papers of 12 the audit. The board shall engage the outside auditors, who shall be responsible to the 13 board. The bank shall submit copies of each report of the outside auditors to the 14 legislative auditor within 30 days of the report by the bank. 15 (d) The state bank examiners shall perform an annual qualitative examination 16 and evaluation of the bank. The commissioner of commerce and economic 17 development shall assess the bank a fee established under AS 06.01.010(b) for the 18 actual expenses incurred by the Department of Commerce and Economic Development 19 in connection with the examination. The examiners shall report to the board on the 20 examination. The examiners shall prepare a summary report evaluating the bank's loan 21 portfolio quality on a statistical basis and addressing the appropriateness and 22 effectiveness of the bank's policies, practices, and management within the context of 23 the bank's statutory purposes. The examiners shall distribute copies of the summary 24 report to the bank, the legislature, and the governor, and the other records related to 25 the examination of the bank are subject to AS 06.01.025. 26 * Sec. 24. AS 44.81 is amended by adding a new section to read: 27 Sec. 44.81.300. UNCLAIMED DISTRIBUTIONS, REDEMPTIONS, OR 28 PAYMENTS. The bank may revoke a distribution of net proceeds by the bank or a 29 redemption of or payment based upon an allocation of proceeds or upon capital stock 30 issued by the bank if the distribution, redemption, or payment remains unclaimed six 31 years after the date authorized for payment, redemption, or retirement. The amount
01 revoked may revert to an unallocated capital account of the bank if, at least six months 02 before the declared date of revocation, the bank has mailed to the last known address 03 of the person shown by the bank's records to be entitled to the amount a notice that 04 the payment is available to the person; if the address is unknown, the bank shall 05 publish the notice as provided by law for the publication of a summons. A 06 distribution, redemption, or payment subject to this section is not subject to 07 AS 34.45.110 - 34.45.780. 08 * Sec. 25. AS 44.81.350(3) is amended to read: 09 (3) "member of the bank" includes 10 (A) a holder of a share of membership stock of the bank; or 11 (B) a patron of the bank with retained patronage earnings, or 12 other form of capital ownership in the bank, of $2,500 or more to the 13 patron's credit; 14 * Sec. 26. AS 44.81.350 is amended by adding new paragraphs to read: 15 (5) "commercial agriculture" includes commercially-related activity in 16 connection with producing, harvesting, processing, or marketing an agricultural, 17 maricultural, or horticultural commodity, including the breeding, raising, shearing, 18 feeding, caring for, training, and management of livestock, bees, poultry, shellfish, and 19 fur-bearing animals and wildlife, and the planting, cultivating, caring for, harvesting, 20 or processing of forest products on a sustained yield basis; 21 (6) "permit" means a limited entry permit issued under AS 16.43; 22 (7) "resident farmer" means a person who is a resident of the state and 23 who is engaged in commercial agriculture in the state; 24 (8) "resident fisher" means a person who is a resident of the state and 25 who is engaged in commercial fishing in the state. 26 * Sec. 27. AS 44.81.010(c), 44.81.040, 44.81.050, 44.81.060, 44.81.070, 44.81.090, 27 44.81.100, 44.81.110, 44.81.160, 44.81.190, 44.81.220, 44.81.230, 44.81.235, 44.81.240, and 28 44.81.280 are repealed. 29 * Sec. 28. TRANSITION PROVISIONS. This Act does not affect a contract, cause of 30 action, liability, penalty, or proceeding existing, incurred, or accrued on the effective date of 31 this Act. This Act does not affect an action of the Alaska Commercial Fishing and
01 Agriculture Bank taken on or before the effective date of this Act.