AS Title 10, Chapter 10: Business and Industrial Development Corporation Act

Chapter 10. Business and Industrial Development Corporation Act. Sec. 10.10.010. Incorporation. Three or more persons, who are residents of this state, who desire to create an industrial development corporation under this chapter for the purpose of promoting, developing, and advancing the prosperity and economic welfare of the state and, to that end, to exercise the powers and privileges provided in this chapter, may be incorporated by filing articles of incorporation in the office of the commissioner as provided in this chapter. Sec. 10.10.020. Assistance of commissioner. The commissioner shall assist the incorporators in forming the corporation and shall meet with and advise the corporation's board of directors. Sec. 10.10.030. Articles of incorporation and certificate of incorporation. (a) The articles of incorporation must contain: (1) the name of the corporation, which must include the words “Industrial Development Corporation of the State of Alaska”; (2) the location of the principal office of the corporation, but the corporation may have offices in other places in the state fixed by the board of directors; (3) the purposes for which the corporation is organized, which must be to promote, stimulate, develop, and advance the business prosperity and economic welfare of this state and its citizens; to encourage and assist through loans, investments or other business transactions in the location of new business and industry in this state and to rehabilitate and assist existing business and industry; to stimulate and assist in the expansion of all kinds of business activity which will tend to promote the business development and maintain the economic stability of this state, provide maximum opportunities for employment, encourage thrift, and improve the standard of living of the citizens of this state; to cooperate and act in conjunction with other organizations, public or private, in the promotion and advancement of industrial, commercial, agricultural, and recreational developments in this state; and to provide financing for the promotion, development, and conduct of all kinds of business activity in this state; (4) the names and post office addresses of the members of the first board of directors, who, unless otherwise provided by the articles of incorporation or the bylaws, shall hold office for the first year of existence of the corporation or until their successors are elected and have qualified; (5) any provision which the incorporators may choose to insert for the regulation of the business and for the conduct of the affairs of the corporation; any provision creating, dividing, limiting, and regulating the powers of the corporation, the directors, stockholders or any class of the stockholders, including, but not limited to a list of the officers; and any provision governing the issuance of stock certificates to replace lost or destroyed certificates; (6) the amount of authorized capital stock and the number of shares into which it is divided, the par value of each share and the amount of capital with which it will commence business and, if there is more than one class of stock, a description of the different classes; the names and post office addresses of the subscribers of stock and the number of shares subscribed by each; the aggregate of the subscription shall be the minimum amount of capital with which the corporation shall commence business and may not be less than $1,000. (b) The articles of incorporation shall be in writing subscribed by not fewer than three natural persons competent to contract and acknowledged by each of the subscribers before an officer authorized to take acknowledgments and filed in duplicate originals in the office of the commissioner for approval. (c) The commissioner may not approve articles of incorporation for a corporation organized under this chapter until a total of at least seven financial institutions authorized to do business within this state have agreed in writing to become members of the corporation, and the agreement in writing is filed with the commissioner together with the articles of incorporation. When the articles of incorporation have been filed in the office of the commissioner and approved, the commissioner shall (1) endorse on each duplicate original the word “filed,” and the date of the filing; (2) file one duplicate original in the commissioner's office; (3) issue a certificate of incorporation and affix the other duplicate original to it; (4) return to the incorporators or their representative the certificate of incorporation, together with the duplicate original of the articles of incorporation affixed. (d) Upon the issuance of the certificate of incorporation, the corporate existence begins. The certificate of incorporation is conclusive evidence that all conditions precedent required to be performed by the incorporators have been complied with and that the corporation has been incorporated. Sec. 10.10.040. General powers. In furtherance of its purposes and in addition to the powers now or hereafter conferred on business corporations by AS 10.06.010 , the corporation shall, subject to the restrictions and limitations contained in this chapter have the following powers: (1) to elect, appoint, and employ officers, agents, and employees; to make contracts and incur liabilities for a purpose of the corporation, except that the corporation may not incur a secondary liability by way of guaranty or endorsement of the obligations of a person, firm, corporation, joint-stock company, association or trust, or in another manner; (2) to borrow money from its members and the Small Business Administration and any other federal agency for a purpose of the corporation; to issue for those purposes its bonds, debentures, notes or other evidences of indebtedness, whether secured or unsecured, and to secure them by mortgage, pledge, deed of trust or other lien on its property, franchises, rights, and privileges of every kind and nature, or a part of them or interest in them, without securing stockholder or member approval; (3) to make loans to a person, firm, corporation, joint-stock company, association or trust, and to establish and regulate the terms and conditions with respect to the loans and the charges for interest and service connected with them, except that the corporation may not approve an application for a loan unless and until the person applying for the loan shows that the applicant has applied for the loan through ordinary banking channels and that the loan has been refused by at least one bank or other financial institution; (4) to purchase, receive, hold, lease, or otherwise acquire, and to sell, convey, transfer, lease, or otherwise dispose of real and personal property, together with the rights and privileges that are incidental and appurtenant to the property and the use of it, including real or personal property acquired by the corporation from time to time in the satisfaction of debts or enforcement of obligations; (5) to acquire the good will, business, rights, real and personal property and other assets, or a part of them, or interest in them, of any persons, firms, corporations, joint-stock companies, associations or trusts, and to assume, undertake, or pay the obligations, debts, and liabilities of the person, firm, corporation, joint-stock company, association or trust; to acquire improved or unimproved real estate for the purpose of constructing industrial plants or other business establishments thereon or for the purpose of disposing of the real estate to others for the construction of industrial plants or other business establishments; and to acquire, construct or reconstruct, alter, repair, maintain, operate, sell, convey, transfer, lease, or otherwise dispose of industrial plants or business establishments; (6) to acquire, subscribe for, own, hold, sell, assign, transfer, mortgage, pledge or otherwise dispose of the stock, shares, bonds, debentures, notes, or other securities and evidences of interest in, or indebtedness of any person, firm, corporation, joint-stock company, association or trust, and while the owner or holder of them to exercise all the rights, powers, and privileges of ownership, including the right to vote on them; (7) to mortgage, pledge, or otherwise encumber any property, right or thing of value, acquired under the powers contained in (4), (5), and (6) of this section as security for the payment of a part of the purchase price of them; (8) to cooperate with and avail itself of the facilities of the United States Department of Commerce, the state Department of Commerce, Community, and Economic Development, and any other state or federal governmental agencies; and to cooperate with and assist, and otherwise encourage organizations in the various communities of the state in the promotion, assistance, and development of the business prosperity and economic welfare of the communities or of the state or of a part of the state; (9) to do whatever is necessary or convenient to carry out the powers expressly granted in this chapter. Sec. 10.10.050. Authorization of members. (a) Notwithstanding any rule at common law or provision of a general or special law or provision in their respective charters, agreements of association, articles of organization, or trust indentures, (1) a natural person, domestic corporation, foreign corporation authorized to transact business in the state, insurance company, or a financial institution which becomes a member of the corporation, may acquire, purchase, hold, sell, assign, transfer, mortgage, pledge, or otherwise dispose of shares of the capital stock of the corporation or bonds, securities or other evidence of indebtedness created by the corporation; and while the owner of shares of capital stock of the corporation may exercise all the rights, powers and privileges of ownership, all without the approval of any regulatory authority of the state except as otherwise provided in this chapter; the amount of capital stock of the corporation which may be acquired by a member may not exceed 10 percent of the loan limit of the member; (2) a financial institution may become a member of the corporation and make loans to the corporation as provided in this chapter. (b) The amount of capital stock of the corporation which a member may acquire under the authority granted in this section is in addition to the amount of capital stock in corporations which the member may otherwise be authorized to acquire. Sec. 10.10.060. Admission to membership. A financial institution may request membership in the corporation by making application to the board of directors on the form and in the manner the board of directors require, and membership becomes effective upon acceptance of the application by the board. Sec. 10.10.070. Loans by members. (a) Each member of the corporation shall make loans to the corporation when called upon by it to do so on the terms and other conditions approved from time to time by the board of directors, subject to the following conditions: (1) all loans limits shall be established at the thousand dollar amount nearest to the amount computed under this subsection; (2) a loan to the corporation may not be made if immediately thereafter the total amount of the obligations of the corporation would exceed 10 times the amount then paid in on the outstanding capital stock of the corporation; (3) the total amount outstanding on the loans to the corporation made by any member at any one time, when added to the amount of the investment in the capital stock of the corporation then held by the member, may not exceed (A) 20 percent of the total amount then outstanding on loans to the corporation by all members, including in the total amount outstanding amounts validly called for loan but not yet loaned; (B) the following limit, to be determined as of the time the member becomes a member on the basis of the audited balance sheet of the member at the close of its fiscal year immediately preceding its application for membership, or in the case of an insurance company, its last annual statement to the state insurance commissioner: two and one-half percent of the capital and surplus of a commercial bank or trust company; one-half of one percent of the total outstanding loans made by a savings and loan association or building and loan association; two and one-half percent of the capital and unassigned surplus of a stock insurance company, except a fire insurance company; two and one-half percent of the unassigned surplus of a mutual insurance company, except a fire insurance company; two and one-half percent of the unassigned surplus of a mutual insurance company, except a fire insurance company; one-tenth of one percent of the assets of a fire insurance company; and such limits as may be approved by the board of directors of the corporation for other financial institutions; (4) subject to (3)(A) of this subsection, each call made by the corporation shall be prorated among the members of the corporation in substantially the same proportion that the adjusted loan limit of each member bears to the aggregate of the adjusted loan limits of all members; the adjusted loan limit of a member shall be the amount of the member's loan limit, reduced by the balance of outstanding loans made by the member to the corporation and the investment in capital stock of the corporation held by the member at the time of the call; (5) all loans to the corporation by members shall be evidenced by bonds, debentures, notes, or other evidences of indebtedness of the corporation, which shall be freely transferable at all times, and which shall bear interest at a rate of not less than one-quarter of one percent in excess of the rate of interest determined by the board of directors to be the prime rate prevailing at the date of issuance thereof on unsecured commercial loans; the prime rate of interest is defined in this chapter as the rate of interest normally paid by banks or lending institutions. (b) A member may not be obligated to make loans to the corporation pursuant to calls made after notice of the intended withdrawal of the member. Sec. 10.10.080. Duration of membership. Membership in the corporation is for the duration of the corporation, but upon written notice given to the corporation five years in advance, a member may withdraw from membership in the corporation at the expiration date of the notice. Sec. 10.10.090. Powers of stockholders and members. The stockholders and the members of the corporation have the following powers of the corporation: (1) to determine the number of and elect directors as provided in AS 10.10.120 ; (2) to make, amend, and repeal bylaws; (3) to amend this charter as provided in AS 10.10.110 ; (4) to dissolve the corporation as provided in AS 10.10.180 ; (5) to do all things necessary or desirable to secure aid, assistance loans and other financing from any financial institutions, and from any agency established under 15 U.S.C. 661 — 697 (Small Business Investment Act of 1958), or other similar federal laws now or hereafter enacted; (6) to exercise other of the powers of the corporation consistent with this chapter which may be conferred on the stockholders and the members by the bylaws. Sec. 10.10.100. Voting by members and stockholders. (a) On all matters requiring action by the stockholders and the members of the corporation, the stockholders and members shall vote separately by classes, and except as otherwise provided in this chapter, these matters require the affirmative vote of a majority of the votes to which the stockholders present or represented at the meeting are entitled and the affirmative vote of a majority of the votes to which the members present or represented at the meeting are entitled. (b) Each stockholder shall have one vote, in person, by remote communication, or by proxy, for each share of capital stock held by that stockholder, and each member shall have one vote, in person, by remote communication, or by proxy, except that a member having a loan limit of more than $1,000 shall have one additional vote, in person, by remote communication, or by proxy, for each additional $1,000 that the member is authorized to have outstanding on loans to the corporation at any one time as determined under AS 10.10.070 (a)(3)(B). (c) A proxy may be executed in writing by a stockholder or by the authorized attorney-in-fact of the stockholder, or executed by electronic transmission by the stockholder or by the authorized attorney-in-fact of the stockholder. A proxy executed by electronic transmission must (1) be directed to the person who will be the holder of the proxy or to a proxy solicitation person, including a proxy support service organization or similar agent that is authorized by the person who will be the holder of the proxy to receive the transmission; and (2) include information that demonstrates that the stockholder authorized the transmission. (d) In this section, “electronic transmission” and “remote communication” have the meanings given in AS 10.06.990 . Sec. 10.10.110. Amendment of articles. (a) The articles of incorporation may be amended by the vote of the stockholders and the members of the corporation, voting separately by classes. Amendments must be approved by the affirmative vote of two-thirds of the votes to which the stockholders are entitled and two-thirds of the votes to which the members are entitled. An amendment of the articles of incorporation may not be made which is inconsistent with the general purposes expressed in this chapter or which authorizes an additional class of capital stock to be issued, or which eliminates or curtails the right of the commissioner of administration to examine the corporation or the obligation of the corporation to make reports as provided in AS 10.10.150 . An amendment of the articles of incorporation which increases the obligation of a member to make loans to the corporation, or makes a change in the principal amount, interest rate, maturity date, or in the security or credit position of an outstanding loan of a member to the corporation, or affects a member's right to withdraw from membership as provided in this chapter, or affects a member's voting rights as provided in this chapter, may not be made without the consent of each member affected by the amendment. (b) Within 30 days after a meeting at which an amendment of the articles of incorporation has been adopted, articles of amendment signed and sworn to by the president, treasurer, and a majority of the directors, setting out the amendment and adoption of the amendment, shall be submitted in duplicate originals to the commissioner who shall examine them, and upon finding that they conform to the requirements of this chapter, shall (1) endorse on each duplicate original the word “filed,” and the date of the filing; (2) file one duplicate original in the commissioner's office; (3) issue a certificate of amendment and affix the other duplicate original to it; (4) return to the corporation or its representative the certificate of amendment, together with the duplicate articles of amendment affixed. (c) Upon the issuance of a certificate of amendment by the commissioner, the amendment becomes effective. Sec. 10.10.120. Directors and officers; annual and special meetings. (a) The business and affairs of the corporation shall be conducted by a board of directors, a president, a vice president, a secretary, a treasurer, and other officers and agents the corporation by its bylaws may authorize. The board of directors shall consist of a number not less than seven nor more than 21, determined in the first instance by the incorporators and thereafter annually by the members and the stockholders of the corporation. The board of directors may exercise all the powers of the corporation except those that are conferred by law or by the bylaws of the corporation upon the stockholders or members and shall choose and appoint all the agents and officers of the corporation and fill all vacancies except on the board of directors. The board of directors shall be elected in the first instance by the incorporators and thereafter at the annual meeting, which shall be held during the month of January or, if no annual meeting can be held in the year of incorporation, then within 90 days after the approval of the articles of incorporation at a special meeting. At each annual meeting, or at each special meeting held as provided in this section, the members of the corporation shall elect two-thirds of the board of directors, and the stockholders shall elect the remaining directors. The directors hold office until the next annual meeting of the corporation or special meeting held in lieu of the annual meeting after the election and until their successors are elected and qualified unless sooner removed in accordance with the bylaws. A vacancy in the office of a director elected by the members shall be filled by the directors elected by the members, and a vacancy in the office of a director elected by the stockholders shall be filled by the directors elected by the stockholders. (b) Directors and officers are not responsible for losses unless they are occasioned by the wilful misconduct of the directors and officers. Sec. 10.10.130. Earned surplus. Each year the corporation shall set apart as earned surplus not less than 10 percent of its net earnings for the preceding fiscal year until the surplus equals one half of the amount paid in on the capital stock then outstanding. Whenever the amount of the surplus is less than the required amount, it shall be built up again to the required amount in the manner provided for its original accumulation. Net earnings and surplus shall be determined by the board of directors, after providing for reserves the directors consider desirable, and the determination of the directors made in good faith shall be conclusive on all persons. Sec. 10.10.140. Designation of depository; prohibition against receiving deposits. The corporation may not deposit any of its funds in a banking institution unless the institution has been designated as a depository by a vote of a majority of the directors present at an authorized meeting of the board of directors, exclusive of a director who is an officer or director of the depository. The corporation may not receive money on deposit. Sec. 10.10.150. Examinations, reports of condition, and required information. The corporation shall be examined at least once annually by the commissioner of administration and shall make reports of its condition not less than annually to the commissioner of administration and more frequently upon call of the commissioner of administration, who in turn shall make copies of the reports available to the commissioner of commerce, community, and economic development and the governor. The corporation shall also furnish other information that may from time to time be required by the commissioner of administration. The corporation shall pay the actual cost of the examinations. Sec. 10.10.160. First meeting of corporation. (a) The first meeting of the corporation shall be called by a notice signed by three or more of the incorporators, stating the time, place, and purpose of the meeting. A copy of the notice shall be mailed or delivered to each incorporator at least five days before the day appointed for the meeting. The first meeting may be held without notice upon agreement in writing signed by all the incorporators. There shall be recorded in the minutes of the meeting a copy of the notice or of the unanimous agreement of the incorporators. (b) At the first meeting, the incorporators shall choose, by ballot, a temporary clerk, adopt bylaws, elect directors by ballot, and act upon other matters within the powers of the corporation. The temporary clerk shall be sworn and shall make and attest a record of the proceedings. A majority of the incorporators, but not fewer than three, shall be a quorum for the transaction of business. Sec. 10.10.170. Duration of corporation. The duration of the corporation shall be 50 years, subject, however, to the right of the stockholders and the members to dissolve the corporation before the expiration of that period as provided in AS 10.10.180 . Sec. 10.10.180. Dissolution of corporation. The corporation may upon the affirmative vote of two-thirds of the votes to which the stockholders are entitled and two-thirds of the votes to which the members are entitled dissolve the corporation. Upon dissolution of the corporation, none of the corporation's assets shall be distributed to the stockholders until all sums due the members of the corporation as creditors of the corporation have been paid in full. Sec. 10.10.185. Cancellation of corporate filings. The provisions in AS 10.06 (Alaska Corporations Code) relating to the cancellation of certain corporate filings apply to corporations created under this chapter. Sec. 10.10.190. Prohibition of pledge of credit of state. The credit of the state may not be pledged to a corporation organized under the provisions of this chapter. Sec. 10.10.200. Corporation a “state development company”. A corporation organized under the provisions of this chapter shall be a state development company, as defined in 15 U.S.C. 661 — 696 (Small Business Investment Act of 1958), or any other similar federal legislation, and shall be authorized to operate on a statewide basis. Sec. 10.10.210. Definitions. In this chapter, unless the context otherwise requires, (1) “board of directors” means the board of directors of the corporation created under this chapter; (2) “commissioner” means the commissioner of commerce, community, and economic development; (3) “corporation” means the Alaska Business and Industrial Development Corporation created under this chapter; (4) “financial institution” means a banking corporation or trust company, savings and loan association, insurance company or related corporation, partnership, foundation, or other institution engaged primarily in lending or investing funds; (5) “loan limit” means for any member, the maximum amount permitted to be outstanding at one time on loans made by the member to the corporation, as determined under this chapter; (6) “member” means a financial institution authorized to do business within this state that undertakes to lend money to a corporation created under this chapter, upon its call, and in accordance with this chapter. Sec. 10.10.220. Short title. This chapter may be cited as the Business and Industrial Development Corporation Act.