00CS FOR HOUSE BILL NO. 363(STA)                                                                                          
01 "An Act relating to reserve accounts held in connection with mortgage loans."                                           
02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
03    * Section 1.  AS 06.05 is amended by adding a new section to read:                                                   
04  Sec. 06.05.285.  INTEREST ON RESERVE ACCOUNTS.  (a)  A bank that                                                      
05 requires the payment of money by a borrower into an escrow reserve account for the                                      
06 payment of taxes, assessments, insurance premiums, or home owner's association dues                                     
07 in connection with a mortgage loan shall pay interest on the amount of money in the                                     
08 account that exceeds the amount required to be held in reserve by federal law or                                        
09 regulation.  The rate of interest paid on that money shall equal three percent per year                                 
10 and shall be computed on the average balance in the account each month.                                                 
11  (b)  Interest earned under (a) of this section shall be, at the election of the                                       
12 borrower, annually credited to the remaining principal balance on the mortgage loan                                     
13 or paid to the borrower.                                                                                                
14  (c)  At the end of each year, the following information regarding each escrow                                         

01 reserve account during that year shall be delivered by the bank to the borrower:                                        
02   (1)  the cost to the bank of administering the account;                                                              
03   (2)  the amount that was in the account on the last day of each month;                                               
04   (3)  the amount of interest earned on the account each month;                                                        
05   (4)  a schedule of payments made by the bank from the account.                                                       
06    * Sec. 2.  AS 06.05.285, enacted in sec. 1 of the Act, applies to escrow reserve accounts                            
07 established before the effective date of this Act, as well as to accounts established on or after                       
08 the effective date of this Act, with interest to begin accruing on the effective date of this Act                       
09 on money in those accounts.