Alaska Stat. § 16.10.320 – Limitations on loans

(a) [See delayed amendment note.] Except as permitted in (h) and (l) of this section, a loan under AS 16.10.300 — 16.10.370
1. (1) may not exceed a term of 15 years, except for extensions under AS 16.10.310(a)(4);
2. (2) may not bear interest
  1. (A) exceeding the prime rate, as defined by AS 44.88.599, plus two percentage points; or
  2. (B) at a rate of more than 5.25 percent a year;
3. (3) must be secured by a first priority lien and appropriate security agreement;
4. (4) may not exceed 80 percent of the appraised value of the collateral used to secure the loan; and
5. (5) may not be made to a person who has a past due child support obligation established by court order or by the child support services agency under AS 25.27.160 — 25.27.220 at the time of application.
(b) A lien in favor of the state is not required for loans guaranteed fully by the federal government under 46 U.S.C. 1271 — 1279b (Federal Ship Financing Act of 1972), as amended. In the case of a security agreement given to secure a loan made under AS 16.10.300 — 16.10.370 and covering a vessel documented under the laws of the United States and so long as 46 U.S.C. 911-984 (Ship Mortgage Act, 1920) as amended, and 46 U.S.C. 801-842 (Shipping Act, 1916), as amended, remain ambiguous with respect to whether or not a state or state agency qualifies as a citizen of the United States for purposes of those Acts, the first lien requirement of this section may be satisfied by the recordation and endorsement of a first preferred ship mortgage under 46 U.S.C. 911-984, and by perfection of a security interest under AS 45.29 (Uniform Commercial Code — Secured Transactions), if the approval of the Secretary of Transportation is obtained under 46 U.S.C. 839 for the transfer to the department of the interest in a vessel documented under the laws of the United States. In the case of a security agreement given to secure a loan made under AS 16.10.300 — 16.10.370 and covering a vessel documented under the laws of the United States, the first lien requirement of this section may also be satisfied by use of a trust deed and bond issued under it, if the trustee is a citizen of the United States and obtains a first preferred ship mortgage on the vessel under 46 U.S.C. 911 — 984, and the approval of the Secretary of Transportation is obtained under 46 U.S.C. 839 and 961 for the transfer of the bond or bonds to the department if the trustee is not a trustee approved by the Secretary of Transportation under 46 U.S.C. 808, 835, and 961.
(c) [Repealed, § 72 ch 113 SLA 1982.]
(d) [See delayed amendment note.] The total of balances outstanding on loans made to a borrower under AS 16.10.310(a)(1)(A) may not exceed $400,000. The total of balances outstanding on loans made to a borrower under AS 16.10.310(a)(1)(B) may not exceed $400,000 . The total of balances outstanding on loans made to a borrower under AS 16.10.310(a)(1)(C) may not exceed $400,000. The total of balances outstanding on loans made to a borrower under AS 16.10.310(a)(1)(D) to satisfy past due federal tax obligations may not exceed $35,000. The total of balances outstanding on loans made under AS 16.10.310(a)(1)(E) may not exceed $2,000,000 for each community eligible under federal statute or regulation to establish or participate in the establishment of a community quota entity. The total of balances outstanding on loans made to a borrower under AS 16.10.310(a)(1)(F) may not exceed $400,000. Excluding loans made under AS 16.10.310(a)(1)(E), the total of balances outstanding on all loans, including debt refinancing under AS 16.10.310(a), made to a borrower under AS 16.10.300 — 16.10.370 may not exceed $400,000.
(e) Two or more individual commercial fishermen who each satisfy the requirements specified in AS 16.10.310(a)(1)(B) may jointly, whether operating as a corporation, partnership, joint venture, or otherwise, obtain a commercial fishing loan for the repair, restoration, or upgrading of an existing vessel and gear, for the purchase of gear, and for the construction or the purchase of a fishing vessel. Loans granted under this subsection may not exceed the amount specified in (d) of this section multiplied by the number of qualified commercial fishermen applying for the loan.
(f) [Repealed, § 34 ch 79 SLA 1985.]
(g) [Repealed, § 72 ch 113 SLA 1982.]
(h) A loan for an entry permit under AS 16.10.310(a)(1)(B) may be made for up to 100 percent of the appraised value of the collateral used to secure the loan if the borrower demonstrates that (1) the borrower has at least three years of experience as a commercial fisherman in the fishery to which the entry permit applies; and (2) the borrower has not owned an Alaska limited entry permit in the year immediately preceding the application for the loan. In this subsection “three years of experience as a commercial fisherman in the fishery” means that for an accumulated total of three fishing seasons in the same fishery the borrower has actively participated in the commercial harvest of fish under the direction of a limited entry permit holder.
(i) If a loan is made to a borrower under AS 16.10.310(a)(1)(A), a subsequent loan may not be made to the borrower under AS 16.10.310(a)(1)(B), unless the loan requested under AS 16.10.310(a)(1) is for propulsion engine or generator engine replacement on an existing vessel for the purpose of improving fuel efficiency or is for the purchase of an entry permit. If a loan is made to a borrower under AS 16.10.310(a)(1)(B), a subsequent loan may be made to the borrower under AS 16.10.310(a)(1)(A) if the total of the balance outstanding on loans received by the borrower under AS 16.10.310(a)(1)(A) and (B) does not exceed $400,000.
(j) All principal and interest payments, and any money chargeable to principal or interest that is collected through liquidation by foreclosure or other process, on loans made under AS 16.10.300 — 16.10.370, shall be paid into the commercial fishing revolving loan fund.
(k) Two or more individuals who each satisfy the requirement specified in AS 16.10.310(a)(1)(F) may jointly, whether operating as a corporation, partnership, joint venture, or otherwise, obtain a commercial fishing loan, not to exceed $300,000, for the upgrade of existing tender vessels and gear to improve the quality of Alaska seafood products.
(l) Until a community quota entity has used loans under this subsection to purchase fishing quota shares cumulatively authorizing a total take of 50,000 pounds, a loan or a portion of a loan made to that community quota entity under AS 16.10.310(a)(1)(E) may not exceed 95 percent of the appraised value of the collateral used to secure the loan or a portion of the loan. A loan to a community quota entity under AS 16.10.310(a)(1)(E)
1. (1) may not exceed a term of 25 years, except for extensions under AS 16.10.310(a)(4);
2. (2) may not, alone or in combination with other loans to the community quota entity under AS 16.10.310(a)(4), exceed $1,000,000 in loans to one community quota entity;
3. (3) may have terms that allow for a community quota entity to defer interest payments for up to two years; and
4. (4) is not eligible for refinancing by the department.
(m) In this section, “cost of funds” means the true interest cost expressed as a rate based on the prime rate plus one percentage point plus an additional percentage determined by the department to represent risk of loss, term of credit facility, the allocable expense of operation, cost of issuance, and loan servicing costs.