CSHB 121(FIN): "An Act relating to the examinations, board, loans, and records of the Alaska Commercial Fishing and Agriculture Bank; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 121(FIN) 01 "An Act relating to the examinations, board, loans, and records of the Alaska 02 Commercial Fishing and Agriculture Bank; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 44.81.020(a) is amended to read: 05 (a) The bank shall be governed by a board of directors consisting of seven to 06 nine natural persons. The number is determined by the bank's bylaws. Two board 07 members shall be appointed by the governor of the state. The other board members 08 shall be elected by the members of the bank as provided in the bank's bylaws, except 09 that at least one of the elected board members must be a resident farmer. The board 10 members appointed under this section must be residents of the state and meet the 11 requirements of AS 39.05.100. 12 * Sec. 2. AS 44.81.215 is amended to read: 13 Sec. 44.81.215. Lending powers of the bank. The bank may 14 (1) make loans to individuals, including married couples, who are
01 residents of the state and who are engaged in commercial agriculture or fishing, 02 including harvesters, processors, suppliers, and marketers, if at least one of the 03 primary obligors on the loan is a member of the bank; 04 (2) make loans to corporations, partnerships, or limited liability 05 companies engaged in commercial agriculture or fishing if the majority interest of the 06 corporation, partnership, or limited liability company is beneficially owned by 07 residents of the state and a majority of the owners are residents of the state, and if at 08 least one of the primary obligors on a loan is a member of the bank; however, the bank 09 may not make a loan under this paragraph to a corporation, partnership, or limited 10 liability company for the purchase of a new or existing fishing boat or for the repair or 11 renovation of an existing fishing boat if the primary purpose of the fishing boat is to 12 commercially harvest fishery resources, unless the corporation, partnership, or limited 13 liability company is wholly owned and controlled by residents of the state, and unless 14 at least one of the primary obligors on the loan is a member of the bank; 15 (3) make loans for limited entry permits to individuals who fish 16 commercially if the individual is a state resident; loans made under this paragraph are 17 subject to AS 44.81.231; 18 (4) make loans [NOT TO EXCEED $500,000] to individuals, 19 including married couples, who are residents of the state and who will use the loan 20 proceeds to commercially engage in tourism within the state if at least one of the 21 primary obligors on the loan is a member of the bank; 22 (5) make loans [NOT TO EXCEED $1,000,000] to corporations, 23 partnerships, or limited liability companies that will use the loan proceeds to 24 commercially engage in tourism within the state if the majority interest of the 25 corporation, partnership, or limited liability company is beneficially owned by 26 residents of the state and a majority of the owners are residents of the state, and if at 27 least one of the primary obligors on the loan is a member of the bank; 28 (6) make loans [NOT TO EXCEED $500,000] to individuals, 29 including married couples, who are residents of the state and who will use the loan 30 proceeds to commercially engage in the development or exploitation of natural 31 resources within the state if at least one of the primary obligors on the loan is a
01 member of the bank; 02 (7) make loans [NOT TO EXCEED $1,000,000] to corporations, 03 partnerships, or limited liability companies that will use the loan proceeds to 04 commercially engage in the development or exploitation of natural resources within 05 the state if the majority interest of the corporation, partnership, or limited liability 06 company is beneficially owned by residents of the state and a majority of the owners 07 are residents of the state, and if at least one of the primary obligors on the loan is a 08 member of the bank; 09 (8) make a loan for capital investment or operating capital to a shore- 10 based fish processor, a timber processor, or an agricultural processor or harvester who 11 does not meet the residency or resident ownership requirements of (1) or (2) of this 12 section but meets the other requirements of (1) or (2) of this section, if a facility of 13 the processor or harvester is located in the state and the majority interest in the 14 processor or harvester is beneficially owned by residents of the United States; 15 (9) make a loan to a person, regardless of residency, if the board 16 determines that the loan is necessary to preserve the value of property held by the bank 17 as security for a loan that was made under AS 44.81.210 or this section and that is in 18 default; 19 (10) make loans, as provided in (1), (2), [OR] (4) - (8), or (15) - (18) 20 of this section, that are secured by liens subordinate to valid first liens and security 21 agreements granted to another creditor; 22 (11) accept the pledge of a limited entry permit as security for a loan 23 made under this chapter subject to the conditions set out in AS 44.81.236 on pledges 24 of limited entry permits; 25 (12) make loans in participation with other lenders as provided in (1), 26 (2), [OR] (4) - (8), or (15) - (18) of this section, whether or not an obligor is a member 27 of the bank; 28 (13) purchase or acquire participations in loans from other lenders if 29 the participations conform to the provisions of (1), (2), [OR] (4) - (8), or (15) - (18) of 30 this section, whether or not an obligor is a member of the bank; 31 (14) issue certificates of loan participation to members and to other
01 individuals, corporations, partnerships, and limited liability companies, but the bank 02 may not issue a certificate of loan participation if the certificate would allow 03 participation by the member, individual, corporation, partnership, or limited liability 04 company in loans that individually or cumulatively involve more than 20 percent of 05 the commercial fishery entry permits issued for one type of gear in a specific fishery 06 resource administrative area; 07 (15) make a loan for a tourism-related operation to individuals, 08 including married couples, who are not residents of the state, if 09 (A) the individuals will use the loan proceeds to 10 commercially engage in the operation in the state; 11 (B) a facility of the operation is located in the state; and 12 (C) at least one of the primary obligors on the loan is a 13 member of the bank; 14 (16) make a loan to a corporation, partnership, or limited liability 15 company for a tourism-related operation when a majority of the owners of the 16 corporation, partnership, or limited liability company are not residents of the 17 state, if 18 (A) the corporation, partnership, or limited liability 19 company will use the loan proceeds to commercially engage in the 20 operation in the state; 21 (B) a facility of the operation is located in the state; 22 (C) at least one of the primary obligors on the loan is a 23 member of the bank; and 24 (D) the majority interest in the corporation, partnership, or 25 limited liability company is beneficially owned by residents of the United 26 States; 27 (17) make a loan to individuals, including married couples, who 28 are not residents of the state for an operation that is dedicated to the 29 development or exploitation of natural resources, if 30 (A) the individuals will use the loan proceeds to 31 commercially engage in the operation in the state;
01 (B) a facility of the operation is located in the state; and 02 (C) at least one of the primary obligors on the loan is a 03 member of the bank; 04 (18) make a loan to a corporation, partnership, or limited liability 05 company in which a majority of the owners of the corporation, partnership, or 06 limited liability company are not residents of the state, if the loan is for an 07 operation that is dedicated to the development or exploitation of natural 08 resources, and 09 (A) the corporation, partnership, or limited liability 10 company will use the loan proceeds to commercially engage in the 11 operation in the state; 12 (B) a facility of the operation is located in the state; 13 (C) at least one of the primary obligors on the loan is a 14 member of the bank; and 15 (D) the majority interest in the corporation, partnership, or 16 limited liability company is beneficially owned by residents of the United 17 States. 18 * Sec. 3. AS 44.81.215 is amended by adding new subsections to read: 19 (b) When the bank is determining whether to make a loan, if a loan applicant 20 intends to use the proposed loan collateral primarily in a salmon fishery, the bank shall 21 consider, as part of its determination, whether the principles of conservation and 22 sustained yield will limit the potential borrower's ability to repay the loan in a timely 23 manner. 24 (c) Before making a loan under this section, the board must find that the loan 25 will not result in the displacement of an existing Alaskan-owned business. 26 * Sec. 4. AS 44.81.225(a) is amended to read: 27 (a) To facilitate the development of commercial fisheries and commercial 28 agriculture in geographic areas in which factors such as geographic considerations, 29 uncertainties of communication, or limited demands do not encourage normal lending 30 activities, the bank may make small loans to qualified borrowers who are not members 31 of the bank.
01 * Sec. 5. AS 44.81.225(b) is amended to read: 02 (b) The provisions of this chapter apply to loans authorized by this section 03 except that 04 (1) the borrower is not required to be a member of the bank at the time 05 the loan is approved; and 06 (2) the principal amount of the portion of the loan made by the bank 07 may not exceed $50,000 [$25,000]. 08 * Sec. 6. AS 44.81.225(c) is amended to read: 09 (c) The total amount of money that may be loaned under this section may not 10 exceed 25 [EIGHT] percent of the total capital of the bank. 11 * Sec. 7. AS 44.81.260(a) is amended to read: 12 (a) The records of the bank that are identified with, or identifiable as being 13 derived from the records of, a specific borrower, member of the bank, or applicant for 14 a loan are confidential and may not be disclosed by the bank or by its directors, 15 officers, employees, or agents to a person other than the directors, officers, employees, 16 or agents of the bank, except 17 (1) when required by a federal or state statute; 18 (2) under AS 44.81.270 and 44.81.275; 19 (3) under a search warrant issued under federal law or the law of this 20 state; 21 (4) under a subpoena or court order issued in a civil action under 22 federal law or the law of this state; 23 (5) under a subpoena or court order issued in connection with a 24 proceeding before a federal grand jury or grand jury of this state; 25 (6) under a summons or subpoena issued by an agency or a department 26 of the United States or this state, or an officer, employee, or agent of the agency or 27 department; 28 (7) under a request by a financial institution, if the request is solely for 29 the stated written purpose of determining the creditworthiness [CREDIT 30 WORTHINESS] of a member or borrower as an applicant for credit, and if the 31 information disclosed by the bank pertains only to the payment history of the member
01 or borrower; 02 (8) under a request by a lender that has extended or is considering 03 extending credit to the bank if the credit is or may be secured by the pledge of a loan 04 by the bank; 05 (9) when disclosed to the attorney general of the United States or to a 06 law enforcement agency of this state if the records may be relevant to a report or 07 investigation of a possible violation of federal law or a law of this state. 08 * Sec. 8. AS 44.81.260 is amended by adding a new subsection to read: 09 (e) Notwithstanding (a) and (b) of this section, the bank may provide a list of 10 the members of the bank who are eligible to serve as a director of the bank to members 11 of the bank who are eligible to vote for directors of the bank. 12 * Sec. 9. AS 44.81 is amended by adding a new section to read: 13 Sec. 44.81.275. Examinations. (a) At intervals that are not greater than 36 14 months, an examiner from the department shall perform an examination of the bank. 15 Each interval shall be determined by the commissioner. During the examination, the 16 examiner shall evaluate the quality of the bank's loan portfolio on a statistical basis 17 and on the appropriateness and effectiveness of the bank's policies, practices, and 18 management to carry out the bank's statutory purposes. 19 (b) The examiner shall prepare a summary report of the examiner's findings 20 and conclusions. The department shall distribute a copy of the report to the bank and 21 to the legislative auditor, but the records, information, and findings of the department 22 related to the examination are otherwise confidential under AS 06.01.025. 23 (c) The commissioner shall assess the bank a fee for the actual expenses 24 necessarily incurred by the department in connection with an examination performed 25 under this section. The fee must include the proportionate part of the salaries and cost 26 of employee benefits of the examiners while conducting the examination and while 27 preparing the summary report required by (b) of this section and the transportation 28 costs and per diem of each examiner while away from the examiner's duty station. The 29 fee may not exceed the actual cost to the department for the examination. The 30 commissioner shall assess the fee as soon as feasible after the examination has been 31 completed. The bank shall pay the assessment within 30 days after receiving the
01 commissioner's notice of the assessment. 02 (d) In this section, 03 (1) "commissioner" means the commissioner of commerce, 04 community, and economic development; 05 (2) "department" means the Department of Commerce, Community, 06 and Economic Development. 07 * Sec. 10. AS 44.81.020(f) is repealed. 08 * Sec. 11. The uncodified law of the State of Alaska is amended by adding a new section to 09 read: 10 EXAMINATIONS. Notwithstanding AS 44.81.275, added by sec. 9 of this Act, the 11 Department of Commerce, Commerce, and Economic Development may not conduct an 12 examination under AS 44.81.275, added by sec. 9 of this Act, until on or after the date that is 13 one year after the effective date of this Act. 14 * Sec. 12. This Act takes effect immediately under AS 01.10.070(c).