HB 121: "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 HOUSE BILL NO. 121 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 44.81.215 is amended to read: 06 Sec. 44.81.215. Lending powers of the bank. The bank may 07 (1) make loans to individuals, including married couples, who are 08 residents of the state and who are engaged in commercial agriculture or fishing, 09 including harvesters, processors, suppliers, and marketers, if at least one of the 10 primary obligors on the loan is a member of the bank; 11 (2) make loans to corporations, partnerships, or limited liability 12 companies engaged in commercial agriculture or fishing if the majority interest of the 13 corporation, partnership, or limited liability company is beneficially owned by 14 residents of the state and a majority of the owners are residents of the state, and if at
01 least one of the primary obligors on a loan is a member of the bank; however, the bank 02 may not make a loan under this paragraph to a corporation, partnership, or limited 03 liability company for the purchase of a new or existing fishing boat or for the repair or 04 renovation of an existing fishing boat if the primary purpose of the fishing boat is to 05 commercially harvest fishery resources, unless the corporation, partnership, or limited 06 liability company is wholly owned and controlled by residents of the state, and unless 07 at least one of the primary obligors on the loan is a member of the bank; 08 (3) make loans for limited entry permits to individuals who fish 09 commercially if the individual is a state resident; loans made under this paragraph are 10 subject to AS 44.81.231; 11 (4) make loans [NOT TO EXCEED $500,000] to individuals, 12 including married couples, who are residents of the state and who will use the loan 13 proceeds to commercially engage in tourism within the state if at least one of the 14 primary obligors on the loan is a member of the bank; 15 (5) make loans [NOT TO EXCEED $1,000,000] to corporations, 16 partnerships, or limited liability companies that will use the loan proceeds to 17 commercially engage in tourism within the state if the majority interest of the 18 corporation, partnership, or limited liability company is beneficially owned by 19 residents of the state and a majority of the owners are residents of the state, and if at 20 least one of the primary obligors on the loan is a member of the bank; 21 (6) make loans [NOT TO EXCEED $500,000] to individuals, 22 including married couples, who are residents of the state and who will use the loan 23 proceeds to commercially engage in the development or exploitation of natural 24 resources within the state if at least one of the primary obligors on the loan is a 25 member of the bank; 26 (7) make loans [NOT TO EXCEED $1,000,000] to corporations, 27 partnerships, or limited liability companies that will use the loan proceeds to 28 commercially engage in the development or exploitation of natural resources within 29 the state if the majority interest of the corporation, partnership, or limited liability 30 company is beneficially owned by residents of the state and a majority of the owners 31 are residents of the state, and if at least one of the primary obligors on the loan is a
01 member of the bank; 02 (8) make a loan for capital investment or operating capital to a shore- 03 based fish processor, a timber processor, or an agricultural processor or harvester who 04 does not meet the residency or resident ownership requirements of (1) or (2) of this 05 section but meets the other requirements of (1) or (2) of this section, if a facility of 06 the processor or harvester is located in the state and the majority interest in the 07 processor or harvester is beneficially owned by residents of the United States; 08 (9) make a loan to a person, regardless of residency, if the board 09 determines that the loan is necessary to preserve the value of property held by the bank 10 as security for a loan that was made under AS 44.81.210 or this section and that is in 11 default; 12 (10) make loans, as provided in (1), (2), [OR] (4) - (8), (15), or (16) of 13 this section, that are secured by liens subordinate to valid first liens and security 14 agreements granted to another creditor; 15 (11) accept the pledge of a limited entry permit as security for a loan 16 made under this chapter subject to the conditions set out in AS 44.81.236 on pledges 17 of limited entry permits; 18 (12) make loans in participation with other lenders as provided in (1), 19 (2), [OR] (4) - (8), (15), or (16) of this section, whether or not an obligor is a member 20 of the bank; 21 (13) purchase or acquire participations in loans from other lenders if 22 the participations conform to the provisions of (1), (2), [OR] (4) - (8), (15), or (16) of 23 this section, whether or not an obligor is a member of the bank; 24 (14) issue certificates of loan participation to members and to other 25 individuals, corporations, partnerships, and limited liability companies, but the bank 26 may not issue a certificate of loan participation if the certificate would allow 27 participation by the member, individual, corporation, partnership, or limited liability 28 company in loans that individually or cumulatively involve more than 20 percent of 29 the commercial fishery entry permits issued for one type of gear in a specific fishery 30 resource administrative area; 31 (15) make a loan for a tourism-related operation to individuals,
01 including married couples, who are not residents of the state, if 02 (A) the individuals will use the loan proceeds to 03 commercially engage in the operation in the state; 04 (B) a facility of the operation is located in the state; and 05 (C) at least one of the primary obligors on the loan is a 06 member of the bank; 07 (16) make a loan to a corporation, partnership, or limited liability 08 company for a tourism-related operation when a majority of the owners of the 09 corporation, partnership, or limited liability company are not residents of the 10 state, if 11 (A) the corporation, partnership, or limited liability 12 company will use the loan proceeds to commercially engage in the 13 operation in the state; 14 (B) a facility of the operation is located in the state; 15 (C) at least one of the primary obligors on the loan is a 16 member of the bank; and 17 (D) the majority interest in the corporation, partnership, or 18 limited liability company is beneficially owned by residents of the United 19 States; 20 (17) make a loan to individuals, including married couples, who 21 are not residents of the state for an operation that is dedicated to the 22 development or exploitation of natural resources, if 23 (A) the individuals will use the loan proceeds to 24 commercially engage in the operation in the state; 25 (B) a facility of the operation is located in the state; and 26 (C) at least one of the primary obligors on the loan is a 27 member of the bank; 28 (18) make a loan to a corporation, partnership, or limited liability 29 company in which a majority of the owners of the corporation, partnership, or 30 limited liability company are not residents of the state, if the loan is for an 31 operation that is dedicated to the development or exploitation of natural
01 resources, and 02 (A) the corporation, partnership, or limited liability 03 company will use the loan proceeds to commercially engage in the 04 operation in the state; 05 (B) a facility of the operation is located in the state; 06 (C) at least one of the primary obligors on the loan is a 07 member of the bank; and 08 (D) the majority interest in the corporation, partnership, or 09 limited liability company is beneficially owned by residents of the United 10 States. 11 * Sec. 2. AS 44.81.225(a) is amended to read: 12 (a) To facilitate the development of commercial fisheries and commercial 13 agriculture in geographic areas in which factors such as geographic considerations, 14 uncertainties of communication, or limited demands do not encourage normal lending 15 activities, the bank may make small loans to qualified borrowers who are not members 16 of the bank. 17 * Sec. 3. AS 44.81.225(b) is amended to read: 18 (b) The provisions of this chapter apply to loans authorized by this section 19 except that 20 (1) the borrower is not required to be a member of the bank at the time 21 the loan is approved; and 22 (2) the principal amount of the portion of the loan made by the bank 23 may not exceed $50,000 [$25,000]. 24 * Sec. 4. AS 44.81.225(c) is amended to read: 25 (c) The total amount of money that may be loaned under this section may not 26 exceed 25 [EIGHT] percent of the total capital of the bank. 27 * Sec. 5. AS 44.81.260(a) is amended to read: 28 (a) The records of the bank that are identified with, or identifiable as being 29 derived from the records of, a specific borrower, member of the bank, or applicant for 30 a loan are confidential and may not be disclosed by the bank or by its directors, 31 officers, employees, or agents to a person other than the directors, officers, employees,
01 or agents of the bank, except 02 (1) when required by a federal or state statute; 03 (2) under AS 44.81.270 and 44.81.275; 04 (3) under a search warrant issued under federal law or the law of this 05 state; 06 (4) under a subpoena or court order issued in a civil action under 07 federal law or the law of this state; 08 (5) under a subpoena or court order issued in connection with a 09 proceeding before a federal grand jury or grand jury of this state; 10 (6) under a summons or subpoena issued by an agency or a department 11 of the United States or this state, or an officer, employee, or agent of the agency or 12 department; 13 (7) under a request by a financial institution, if the request is solely for 14 the stated written purpose of determining the creditworthiness [CREDIT 15 WORTHINESS] of a member or borrower as an applicant for credit, and if the 16 information disclosed by the bank pertains only to the payment history of the member 17 or borrower; 18 (8) under a request by a lender that has extended or is considering 19 extending credit to the bank if the credit is or may be secured by the pledge of a loan 20 by the bank; 21 (9) when disclosed to the attorney general of the United States or to a 22 law enforcement agency of this state if the records may be relevant to a report or 23 investigation of a possible violation of federal law or a law of this state. 24 * Sec. 6. AS 44.81.260 is amended by adding a new subsection to read: 25 (e) Notwithstanding (a) and (b) of this section, the bank may provide a list of 26 the members of the bank who are eligible to serve as a director of the bank to members 27 of the bank who are eligible to vote for directors of the bank. 28 * Sec. 7. AS 44.81 is amended by adding a new section to read: 29 Sec. 44.81.275. Examinations. (a) At intervals that are not greater than 36 30 months, an examiner from the department shall perform an examination of the bank. 31 Each interval shall be determined by the commissioner. During the examination, the
01 examiner shall evaluate the quality of the bank's loan portfolio on a statistical basis 02 and on the appropriateness and effectiveness of the bank's policies, practices, and 03 management to carry out the bank's statutory purposes. 04 (b) The examiner shall prepare a summary report of the examiner's findings 05 and conclusions. The department shall distribute a copy of the report to the bank and 06 to the legislative auditor, but the records, information, and findings of the department 07 related to the examination are otherwise confidential under AS 06.01.025. 08 (c) The commissioner shall assess the bank a fee for the actual expenses 09 necessarily incurred by the department in connection with an examination performed 10 under this section. The fee must include the proportionate part of the salaries and cost 11 of employee benefits of the examiners while conducting the examination and while 12 preparing the summary report required by (b) of this section and the transportation 13 costs and per diem of each examiner while away from the examiner's duty station. The 14 fee may not exceed the actual cost to the department for the examination. The 15 commissioner shall assess the fee as soon as feasible after the examination has been 16 completed. The bank shall pay the assessment within 30 days after receiving the 17 commissioner's notice of the assessment. 18 (d) In this section, 19 (1) "commissioner" means the commissioner of commerce, 20 community, and economic development; 21 (2) "department" means the Department of Commerce, Community, 22 and Economic Development. 23 * Sec. 8. AS 44.81.020(f) and AS 44.99.030(a)(2) are repealed. 24 * Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section to 25 read: 26 EXAMINATIONS. Notwithstanding AS 44.81.275, added by sec. 7 of this Act, the 27 Department of Commerce, Commerce, and Economic Development may not conduct an 28 examination under AS 44.81.275, added by sec. 7 of this Act, until on or after the date that is 29 one year after the effective date of this Act. 30 * Sec. 10. This Act takes effect immediately under AS 01.10.070(c).