AS Title 45, Chapter 81: Business Loan and Grant Programs

Article 1. New Business Incentive Program. Chapter 81. Business Loan and Grant Programs. Sec. 45.81.010. New business incentive fund. There is established in the department the new business incentive fund. Up to $3,000,000 may be appropriated to the fund each fiscal year. The department may use money in the fund for new business incentive grants. On June 30 of each fiscal year, the unexpended and unobligated balance in the fund lapses into the general fund. Sec. 45.81.020. Eligibility for grants. (a) A new business or a business that is opening a new branch in the state is eligible for a new business incentive grant if (1) the business is primarily engaged in manufacturing a product for export outside of the state; (2) the business will not directly compete with an existing business that is located in the state as determined by the department; (3) for a business located in a municipality, the municipality has provided support to the business in a form and in an amount acceptable to the department; (4) the business is primarily financed by the private sector; and (5) the business has been recommended as complying with the requirements for a business incentive grant by the Alaska Industrial Development and Export Authority. (b) The department shall prescribe by regulation the standards for new business incentive grant eligibility and the form and procedure for submitting grant applications. Subject to the availability of money in the new business incentive fund, the department may award a grant to an eligible applicant in an amount that does not exceed the amount recommended by the Alaska Industrial Development and Export Authority for that applicant. Sec. 45.81.030. Use of grant money. After awarding a new business incentive grant, the department may pay money from the grant to the recipient business only as reimbursement for one or more of the following costs incurred and paid by the business: (1) cost of relocating key personnel and of moving and installing equipment and initial inventory; (2) up to 50 percent of the cost of site preparation and installation of utilities for a new facility; (3) work force training costs for a period of up to 36 months in an amount not to exceed $5,000 for each employee receiving training during a 12-month period if the costs are not covered by another governmental program; (4) up to 50 percent of the costs of business feasibility analyses that relate to situations unique to the state, market studies applicable to the state, and business facility designs necessary to address conditions in the state. Sec. 45.81.040. Grant conditions. (a) A business that receives a new business incentive grant must be operating on the date the grant is awarded and must continue to operate in the state for at least five years after the date the grant is awarded or must, within 90 days after ceasing to operate, repay the grant money together with interest on the money in an amount established by the department. A business that is a branch or subsidiary of another business may not receive a grant unless that other business agrees, in a form acceptable to the department, to be responsible for the obligation to repay grant money and interest under this subsection. (b) The department may set additional terms and conditions for the award of new business incentive grants and for the payment of grant money. The terms and conditions may include requirements for the repayment of grant money even though repayment is not required under (a) of this section. Sec. 45.81.050. Definition. For purposes of AS 45.81.010 — 45.81.050, “department” means the Department of Commerce, Community, and Economic Development. Article 2. Tourism Revolving Loan Fund. Sec. 45.81.100. Creation of a tourism revolving fund. (a) There is created in the Department of Commerce, Community, and Economic Development a tourism revolving fund. All principal and interest payments, and money chargeable to principal or interest that is collected through liquidation by foreclosure or other process on loans made under AS 45.81.100 — 45.81.190, shall be paid into the tourism revolving fund. (b) Money in the fund may be used by the legislature to make appropriations for costs of administering AS 45.81.100 — 45.81.190. Sec. 45.81.110. Special account established. (a) There is established as a special account within the tourism revolving fund the foreclosure expense account. This account is established as a reserve from fund equity. (b) The commissioner of commerce, community, and economic development may expend money credited to the foreclosure expense account when necessary to protect the state's security interest in collateral on loans made under AS 45.81.120 or to defray expenses incurred during foreclosure proceedings after a default by an obligor. Sec. 45.81.120. Powers of the Department of Commerce, Community, and Economic Development. (a) The department may (1) make loans to a business directly involved in the tourist industry; (2) designate agents and delegate powers to them as is necessary; (3) adopt regulations necessary to carry out its functions, including regulations to establish reasonable fees for services provided and charges for collecting the fees; (4) establish amortization plans for the repayment of loans not to exceed 20 years; (5) collect the fees and collection charges established under this subsection. (b) [Repealed, § 84 ch 58 SLA 1999.] Sec. 45.81.130. Limitations on loans. (a) State participation in a loan to a business may not be more than $3,000,000. (b) The loan shall be secured by acceptable collateral and may not exceed 75 percent of the appraised value of the collateral offered as security. (c) The rate of interest may not exceed nine and one-half percent a year on the unpaid balance of the state's share of the loan. (d) A loan of $150,000 or more under AS 45.81.100 — 45.81.190 must be participated in by a financial institution in an amount which is not less than 20 percent of the total amount of the loan. A loan of less than $150,000 does not require participation by a financial institution. (e) The participating financial institution shall administer and service the loan for a reasonable fee not exceeding one-half of one percent. (f) The lien of the state is a first lien to the extent of its portion of the total loan and the participating financial institution shall have a first lien to the extent of its portion of the total loan. Sec. 45.81.140. Sale or transfer of mortgages and notes. (a) The commissioner of commerce, community, and economic development may sell or transfer at par value or at a premium or discount to any bank or other private purchaser for cash or other consideration the mortgages and notes held by the Department of Commerce, Community, and Economic Development as security for loans made under AS 45.81.100 — 45.81.190. (b) [Repealed by § 14 ch 122 SLA 1980.] Sec. 45.81.190. Disposal of property acquired by default or foreclosure. The Department of Commerce, Community, and Economic Development shall dispose of property acquired through default or foreclosure of a loan made under AS 45.81.100 — 45.81.190. Disposal shall be made in a manner that serves the best interests of the state, and may include the amortization of payments over a period of years. Article 3. Small Business Loans. Sec. 45.81.200. Powers and duties of Department of Commerce, Community, and Economic Development in general. (a) The Department of Commerce, Community, and Economic Development shall formulate general policies and adopt regulations necessary to carry out the provisions of AS 45.81.200 — 45.81.290, including regulations to establish fees for services provided and charges for collecting the fees. The department may collect the fees and collection charges established. (b) The department may hold hearings and subpoena witnesses and documents, and administer oaths in connection with hearings. (c) The department shall (1) cooperate with the state and its political subdivisions and agencies; (2) adopt regulations necessary for the conduct of its business and for carrying out the provisions of AS 45.81.200 — 45.81.290, and make necessary regulations to maintain such standards; (3) require bonds and undertakings from persons employed by it as shall in its judgment be necessary, and pay the premiums on them; (4) establish such regional and local offices and such advisory groups as may be necessary or considered expedient to carry out or assist in carrying out its duties and authority. Sec. 45.81.210. Small business loans. (a) The commissioner shall, under regulations and policies adopted by the commissioner, make small business loans to acquire, finance, or refinance or equip businesses, including farming, mining, and fishing, not exceeding $500,000. The loans shall be secured by acceptable collateral and may not exceed 75 percent of the appraised value of the collateral offered as security. The rate of interest may not exceed nine and one-half percent a year on the unpaid balance. For the purposes of this subsection business equipment includes, but is not limited to, fire protection systems approved under AS 18.70.081 and farming equipment. (b) [Repealed, § 14 ch 122 SLA 1980.] (c) [Repealed, § 108 ch 59 SLA 1982.] (d) Money loaned shall be delivered to the borrower as provided in AS 37.25.050 , vouchered in the manner prescribed for state disbursing officers, and charged against the small business revolving loan fund. Each voucher shall be approved by the commissioner or a bonded deputy authorized to act as a certifying officer. Upon repayment of loans by installments, or otherwise, in accordance with the prescribed terms, or upon liquidation by foreclosure or other process, or upon receipt of interest, the money so received shall be turned over to the commissioner of revenue for deposit in the small business revolving loan fund. (e) The commissioner may not disqualify an applicant for, or prejudice an applicant's privilege to receive, a loan to purchase and install a fire protection system solely because of a loan already made to the applicant under AS 45.81.200 — 45.81.290. Sec. 45.81.220. Sale or transfer of mortgages and notes. (a) The commissioner may sell or transfer at par value or at a premium or discount to any bank or other private purchaser for cash or other consideration the mortgages and notes held by the Department of Commerce, Community, and Economic Development as security for loans made under AS 45.81.200 — 45.81.290. (b) [Repealed, § 33 ch 141 SLA 1988.] Sec. 45.81.230. Disposal of property acquired by default or foreclosure. The Department of Commerce, Community, and Economic Development shall dispose of property acquired through default or foreclosure of a loan made under AS 45.81.200 — 45.81.290. Disposal shall be made in a manner that serves the best interests of the state, and may include the amortization of payments over a period of years. Sec. 45.81.240. Creation of fund. (a) There is created the small business revolving loan fund to carry out the purposes of AS 45.81.200 — 45.81.290. This fund shall be used for no other purpose. (b) Money in the fund may be used by the legislature to make appropriations for costs of administering AS 45.81.200 — 45.81.290. Sec. 45.81.250. Special account established. (a) There is established as a special account within the small business revolving loan fund the foreclosure expense account. This account is established as a reserve from fund equity. (b) The commissioner may expend money credited to the foreclosure expense account when necessary to protect the state's security interest in collateral on loans made under AS 45.81.210 or to defray expenses incurred during foreclosure proceedings after a default by an obligor. Sec. 45.81.260. Eligibility for loans. A person is eligible for a loan under AS 45.81.200 — 45.81.290 if (1) the person can establish or demonstrate good character, capacity for financial responsibility, ability to provide sufficient collateral and knowledge of Alaska economic conditions; (2) the person is a resident of the state; and (3) in the judgment of the Department of Commerce, Community, and Economic Development (A) the business shows a definite potential for growth; (B) the borrower will be able to repay the loan; and (C) the loan will potentially create more jobs and provide additional services in the community. Sec. 45.81.290. Definition. In AS 45.81.200 — 45.81.290, “commissioner” means the commissioner of commerce, community, and economic development.