Enrolled HB 76: Relating to the mariculture revolving loan fund and loans from the fund; and providing for an effective date.

00Enrolled HB 76 01 Relating to the mariculture revolving loan fund and loans from the fund; and providing for an 02 effective date. 03 _______________ 04 * Section 1. AS 16.10 is amended by adding a new section to article 14 to read: 05 Sec. 16.10.890. Declaration of policy. It is the policy of the state, under 06 AS 16.10.890 - 16.10.945, to promote mariculture and the enhancement of the state's 07 shellfish fisheries by means of long-term, low-interest loans. 08 * Sec. 2. AS 16.10.900 is amended to read: 09 Sec. 16.10.900. Mariculture revolving loan fund. (a) The mariculture 10 revolving loan fund is created in [WITHIN] the Department of Commerce, 11 Community, and Economic Development to carry out the purposes of AS 16.10.890 - 12 16.10.945 [AS 16.10.900 - 16.10.945]. 13 (b) The mariculture revolving loan fund consists of the following: 14 (1) money appropriated to, transferred to, or received by gift, grant,

01 devise, bequest, or donation to the fund; 02 (2) principal and interest payments or other income earned on loans or 03 investments of the fund; and 04 (3) money chargeable to principal or interest that is collected through 05 liquidation by foreclosure or other process on loans made under AS 16.10.890 - 06 16.10.945 [AS 16.10.900 - 16.10.945]. 07 (c) Money in the fund may be used by the legislature to make appropriations 08 for costs of administering AS 16.10.890 - 16.10.945 [AS 16.10.900 - 16.10.945]. 09 * Sec. 3. AS 16.10.900 is amended by adding a new subsection to read: 10 (d) Of the total amount available annually to the department to carry out the 11 purposes of AS 16.10.890 - 16.10.945, less any funds appropriated under (c) of this 12 section, 60 percent shall be available solely for making loans under 13 AS 16.10.910(a)(1) and the remainder shall be available solely for making loans under 14 AS 16.10.910(a)(2). 15 * Sec. 4. AS 16.10.905 is amended to read: 16 Sec. 16.10.905. Powers and duties of the department. The department may 17 (1) make loans to eligible applicants under AS 16.10.890 - 16.10.945 18 [AS 16.10.900 - 16.10.945] for the planning, construction, and operation of a 19 (A) mariculture business; 20 (B) hatchery that artificially propagates marine aquatic 21 plants or shellfish; or 22 (C) a shellfish enhancement project; 23 (2) receive, take, hold, and administer any appropriation, transfer, gift, 24 grant, bequest, devise, or donation of money for the fund; 25 (3) establish amortization plans for repayment of loans, including 26 extensions of the terms of loans; 27 (4) allow an assumption of a loan if 28 (A) the applicant meets the requirements established under this 29 section; and 30 (B) approval of the assumption would be consistent with the 31 purposes of AS 16.10.890 - 16.10.945 [AS 16.10.900 - 16.10.945];

01 (5) establish the rate of interest for loans consistent with law; 02 (6) charge and collect fees for services provided under AS 16.10.890 - 03 16.10.945 [AS 16.10.900 - 16.10.945]; 04 (7) adopt regulations under AS 44.62 necessary to carry out the 05 provisions of AS 16.10.890 - 16.10.945 [AS 16.10.900 - 16.10.945], including 06 regulations to establish reasonable fees for services provided; and 07 (8) designate agents and delegate powers as necessary to the agents. 08 * Sec. 5. AS 16.10.910(a) is amended to read: 09 (a) For an applicant to be eligible for a loan under AS 16.10.890 - 16.10.945 10 [AS 16.10.900 - 16.10.945], the applicant shall be 11 (1) [BE] a resident of the state who has 12 (A) [, AS DETERMINED UNDER (c) OF THIS SECTION; 13 (2) HAVE] a permitted mariculture farm location in this state; and 14 (B) [(3) HAVE] experience or training in the mariculture 15 industry; or 16 (2) a resident of the state or entity organized under the laws of this 17 state that 18 (A) holds a permit under AS 16.40.100 to operate a 19 hatchery for the purpose of producing aquatic plants or shellfish; or 20 (B) conducts shellfish enhancement projects. 21 * Sec. 6. AS 16.10.910(c) is amended to read: 22 (c) To meet the residency requirements of (a) of this section, an individual 23 [THE] applicant 24 (1) shall physically reside in this state and maintain a domicile in this 25 state during the 24 consecutive months preceding the date of application for the 26 program; and 27 (2) may not have 28 (A) declared or established residency in another state; or 29 (B) received residency or a benefit based on residency from 30 another state. 31 * Sec. 7. AS 16.10.915(a) is amended to read:

01 (a) Except as provided in (b) and (c) of this section, a loan under 02 AS 16.10.890 - 16.10.945 [AS 16.10.900 - 16.10.945] 03 (1) may not exceed 04 (A) $100,000 a year for an applicant under 05 AS 16.10.910(a)(1); or 06 (B) $1,000,000 a year for an applicant under 07 AS 16.10.910(a)(2); 08 (2) may not, unless extended under AS 16.10.905, exceed a term of 09 (A) 20 years for an applicant under AS 16.10.910(a)(1); or 10 (B) 30 years for an applicant under AS 16.10.910(a)(2) [, 11 EXCEPT FOR EXTENSIONS UNDER AS 16.10.905]; 12 (3) may not bear interest at a rate greater than the prime rate, as 13 defined in AS 44.88.599, plus one percentage point, but which may not be less than 14 five percent a year or more than nine percent a year; 15 (4) must be secured by a first priority lien on collateral acceptable to 16 the department; and 17 (5) may not be made to a person who has a past due child support 18 obligation established by court order or by the child support services agency under 19 AS 25.27.160 - 25.27.220 at the time of application. 20 * Sec. 8. AS 16.10.915(b) is amended to read: 21 (b) Subsequent loans may be made to a [THE] borrower under 22 (1) AS 16.10.910(a)(1), [AS 16.10.910] if the total of the balances 23 outstanding on the loans received by the borrower does not exceed $300,000; or 24 (2) AS 16.10.910(a)(2), if the total of the balances outstanding on 25 the loans received by the borrower does not exceed $1,000,000. 26 * Sec. 9. AS 16.10.915(c) is amended to read: 27 (c) A loan under AS 16.10.910 may be made for the purchase of boats or 28 vessels determined to be integral to the operation of the farm or hatchery. 29 * Sec. 10. AS 16.10.915(d) is amended to read: 30 (d) For a loan made under AS 16.10.890 - 16.10.945 [AS 16.10.900 - 31 16.10.945], the department may provide a reduction of the interest rate of not more

01 than two percent if at least 50 percent of the loan proceeds are used by the borrower 02 for purchasing products manufactured or produced in the state. When the department 03 offers a reduction under this subsection, the department shall provide the reduction to 04 all loan applicants who meet the criterion described in this subsection. In this 05 subsection, "manufactured or produced" means processing, developing, or making an 06 item into a new item with a distinct character and use. 07 * Sec. 11. AS 16.10.915 is amended by adding a new subsection to read: 08 (e) The department may not make a loan to an applicant under 09 AS 16.10.910(a)(2) for a hatchery or shellfish enhancement project unless the 10 department determines that the hatchery or enhancement project will 11 (1) be managed in a financially viable manner that is reasonably 12 expected to result in repayment of the loan; and 13 (2) provide a significant contribution to common property fisheries or 14 otherwise benefit the public interest. 15 * Sec. 12. AS 16.10.920 is amended to read: 16 Sec. 16.10.920. Repayment of principal of and interest on loans. The 17 department may not require the repayment of the principal of and interest on a loan 18 made under AS 16.10.910 during the first six years of the loan. However, for a loan 19 made under AS 16.10.910(a)(2), the department may defer repayment of the 20 principal of and interest on the loan for an additional period not to exceed the 21 first 11 years of the loan. The department may provide that interest [INTEREST] 22 on the principal of a loan made under AS 16.10.910(a)(1) does not accrue during 23 [AS 16.10.910 MAY BE DEFERRED FOR] a period [OF] not to exceed [MORE 24 THAN] the first six years of the loan. For a loan made under AS 16.10.910(a)(2), 25 the department shall provide that interest on the principal of the loan does not 26 accrue during the first six years of the loan, and the department may provide 27 that interest on the principal of the loan does not accrue during an additional 28 period not to exceed the first 11 years of the loan. 29 * Sec. 13. AS 16.10 is amended by adding a new section to read: 30 Sec. 16.10.923. Voluntary assessment on sale of shellfish. (a) An association 31 of persons who hold entry permits under AS 16.43 comprising at least 51 percent of

01 the persons holding entry permits and actively participating in a fishery to be benefited 02 by a hatchery program may levy and collect an assessment from among its members 03 for the purpose of securing and repaying a loan made under AS 16.10.890 - 16.10.945. 04 (b) Upon satisfactory demonstration to the department that an assessment 05 levied under this section may reasonably be relied on to secure and repay a loan to be 06 made under AS 16.10.890 - 16.10.945, the department may make the loan. 07 * Sec. 14. AS 16.10.935 is amended to read: 08 Sec. 16.10.935. Disposal of property acquired after default. The department 09 shall dispose of property acquired through default of a loan made under AS 16.10.890 10 - 16.10.945 [AS 16.10.900 - 16.10.945]. Disposal must be made in a manner that 11 serves the best interest of the state and may include the amortization of payments over 12 a period of years. 13 * Sec. 15. AS 16.10.945 is amended to read: 14 Sec. 16.10.945. Definitions. In AS 16.10.890 - 16.10.945 [AS 16.10.900 - 15 16.10.945], 16 (1) "commissioner" means the commissioner of commerce, 17 community, and economic development; 18 (2) "department" means the Department of Commerce, Community, 19 and Economic Development; 20 (3) "hatchery" has the meaning given in AS 16.40.199; 21 (4) "mariculture" means the farming of shellfish and aquatic plants as 22 defined in AS 16.40.199; 23 (5) "shellfish enhancement project" means a project to 24 (A) augment the yield or harvest of shellfish above 25 naturally occurring levels using a natural, artificial, or semiartificial 26 production system; or 27 (B) rehabilitate a shellfish stock by restoring it to its 28 naturally occurring levels of productivity. 29 * Sec. 16. The uncodified law of the State of Alaska is amended by adding a new section to 30 read: 31 APPLICABILITY. Changes made by this Act to the terms of loans made under

01 AS 16.10.890 - 16.10.945 do not apply to a loan made before the effective date of this Act. 02 * Sec. 17. This Act takes effect immediately under AS 01.10.070(c).