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28th Legislature(2013-2014)

Bill Text 28th Legislature


00 Enrolled HB 121                                                                                                         
01 Relating to the examinations, board, loans, and records of the Alaska Commercial Fishing and                            
02 Agriculture Bank; and providing for an effective date.                                                                  
03                           _______________                                                                               
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, Community, 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).                                                
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