AS Title 14, Chapter 42: Postsecondary Education Commission and Loan Corporation

Article 1. Alaska Commission on Postsecondary Education. Chapter 42. Postsecondary Education Commission and Loan Corporation. Sec. 14.42.010. Purpose, intent. (a) [Repealed, § 42 ch 85 SLA 2001.] (b) The legislature affirms that the legal authority for the operation and management of the statewide university system remains with the Board of Regents of the University of Alaska and the legal authority for the operation and management of other postsecondary educational programs remains with the governing boards of the other private nonprofit and proprietary institutions in the state. Sec. 14.42.015. Creation, composition, appointment of members. (a) There is in the Department of Education and Early Development the Alaska Commission on Postsecondary Education consisting of (1) two members of the Board of Regents of the University of Alaska designated by the members of that body; (2) one person representing private nonprofit higher education in the state appointed by the governor; (3) one person representing the Department of Education and Early Development selected by the state Board of Education and Early Development; (4) four persons broadly and equitably representative of the general public appointed by the governor; (5) one member of the Alaska Workforce Investment Board established by AS 23.15.550 designated by the members of that body; (6) one person from the members of the local community college advisory councils appointed by the governor; (7) two members from the legislature, one of whom shall be appointed by the president of the senate and one by the speaker of the house of representatives; (8) one person appointed in accordance with (e) of this section who is a full-time student as defined in AS 14.43.160 ; (9) one administrator appointed by the governor from a proprietary institution of postsecondary education that has an authorization to operate in the state issued under AS 14.48 . (b) No governing body member, trustee, official, or employee of either a public, private, or proprietary institution of postsecondary or higher education in the state may be appointed to membership on the commission as representative of the general public for the purpose of (a)(4) of this section. (c) The governor's appointees are subject to confirmation by the legislature and shall serve at the pleasure of the governor for four-year staggered terms. Members appointed or designated by bodies or agencies other than the governor serve at the pleasure of the appointing authority. Vacancies shall be filled in the same manner as original appointment. (d) A full-time postsecondary student shall be appointed to the Alaska Commission on Postsecondary Education from a list of nominees submitted to the governor. The governor shall make the appointment from the list within 60 days after it is submitted. The list must consist of the names of two or more nominees from private nonprofit institutions of higher education in the state and two nominees from each campus of the University of Alaska. The nominees shall be selected by the students at private nonprofit institutions of higher education and each campus of the University of Alaska by an election held on each campus. Elections under this subsection shall be held concurrently with student regent elections required under AS 14.40.150 (b) and conducted under rules established by the Office of the Governor. If a private nonprofit institution of higher education in the state does not have an organized student governance structure to hold elections, the institution's governing board may nominate a full-time student and forward the name to the governor for consideration. The term of office of the student member of the commission is two years and begins June 1 of the year in which the appointment is made. Membership on the commission is immediately forfeited by a student member who ceases to be a full-time student. Within 60 days after a vacancy occurs, the governor shall appoint a successor from those students appearing on the list of nominees to serve for the unexpired term of the original appointee. The term “campus” used in this subsection means a portion of the University of Alaska designated as a “campus” by the Board of Regents. (e) For the purpose of (a)(4) of this section, “broadly and equitably representative of the general public” means that the public membership of the commission shall include adequate representation both on the basis of sex and on the basis of the significant racial, ethnic, geographic, and economic groups in the state. Sec. 14.42.020. Officers. The chairman and vice-chairman shall be elected from among the members of the commission for a one-year term. A member of the commission may not serve as chairman for more than two consecutive one-year terms. Sec. 14.42.025. Meetings, rules, votes required. The commission shall prescribe its own rules of procedure. The commission shall meet once quarterly at a time and place determined by the chairman, and at other times and places as the chairman, or a majority of the members of the commission, consider necessary. A quorum is a majority of the members of the commission. The votes of the commission members shall be recorded, and effective action requires the affirmative vote of a majority of the commission members present. A commission member may not, with respect to a matter before the commission, vote for or on behalf of, or in any way exercise the vote of, another member of the commission. Sec. 14.42.030. Functions, duties, and powers of the commission. (a) The commission has the following functions, advisory to the governing boards of institutions of public and private higher education in this state, to the governor, the legislature, and to other appropriate state and federal officials: (1) coordinate the development of comprehensive plans for the orderly, systematic growth of public and private postsecondary education, including community colleges and occupational education, in the state and submit recommendations on the need for, and location of, new facilities and programs; (2) review and advise as to the efficiency and effectiveness of all consortia and other cooperative agreements between the institutions of public and private higher education in the state that are parties to them. (b) The commission shall (1) administer the financial aid and interstate education compact programs under AS 14.43.091 — 14.43.920 and 14.43.990, and AS 14.44 ; (2) administer the provisions of AS 14.48 concerning regulation of postsecondary educational institutions; (3) resolve disputes under a consortium or other cooperative agreement between institutions of public and private higher education in the state; and (4) serve as the state agency required under 20 U.S.C. 1001 — 1155. (c) [Repealed, § 42 ch 85 SLA 2001.] (d) [Renumbered as AS 14.42.033 .] (e) The commission may (1) adopt regulations under AS 44.62 (Administrative Procedure Act) to (A) carry out the purposes of (i) AS 14.43.091 — 14.43.849, 14.43.990, AS 14.44 , and AS 14.48 ; (ii) AS 14.43.910 and 14.43.920 as they relate to the purposes of AS 14.43.091 — 14.43.849, 14.43.990, AS 14.44 , and AS 14.48 ; and (iii) AS 14.42.035 and (7) and (8) of this subsection; (B) ensure compliance with the requirements imposed by state and federal statutes and regulations governing the guaranty, insurance, purchase, or other dealings in eligible loans by federal agencies, instrumentalities, or corporations; and (C) establish standards for the (i) administration of hearings conducted under AS 14.43.153 ; and (ii) administrative enforcement of collection orders under AS 14.43.151 — 14.43.155; (2) delegate to the executive director of the commission or a subcommittee of the commission any duty imposed on or power granted to the commission by this chapter, AS 14.43 , AS 14.44 , or AS 14.48 , except its power to adopt regulations and its duty to consider appeals under AS 14.43.100 (b) and AS 14.48.120 ; (3) establish task forces, committees, or subcommittees, not necessarily consisting of commission members, to advise and assist the commission in carrying out its functions; (4) contract with or use existing institutions of postsecondary education or other individuals or organizations to make studies, conduct surveys, submit recommendations, or otherwise contribute to the work of the commission; (5) establish fees for the review of an out-of-state institution that (A) requests approval for participation in the programs under AS 14.43.091 — 14.43.750, 14.43.990, and AS 14.44 ; and (B) is not accredited by a national or regional accreditation association recognized by the Council for Higher Education Accreditation; (6) collect all fees and costs incurred in collection of the amount owed on a loan or repayment obligation if the loan or repayment obligation becomes delinquent or in default; in this paragraph, fees and costs include attorney fees, court costs, and collection fees charged by a collection agency; (7) if approved by the department, receive and analyze performance data for students in grades kindergarten through 12 and enter into contracts for the purpose of assessing education outcomes; and (8) administer a statewide workforce and education-related statistics program under AS 14.42.035 . Sec. 14.42.032. Limitation on awarding loans. [Repealed, § 26 ch 5 SLA 1996.] Sec. 14.42.033. Agreements for medical education. The commission shall enter into agreements with government or postsecondary education officials of this state or other states to provide postsecondary educational services and programs to Alaska residents pursuing a medical education degree sufficient to accommodate at least 20 new program participants each year. An agreement with another state must be limited to services and programs that are unavailable in Alaska. The commission shall require a person participating in a medical education program offered under this section to agree to the repayment condition imposed under AS 14.43.510 . Sec. 14.42.035. Collection of data. (a) The commission may require the institutions of public and private higher education and other institutions of postsecondary education in the state to submit data on costs, selection, and retention of students, enrollments, education outcomes, plant capacities and use, and other matters pertinent to effective planning and coordination, and shall furnish information concerning these matters to the governor, to the legislature, and to other state and federal agencies as requested by them. (b) The commission may maintain a database containing information received under this section, AS 14.42.030 (e)(7) and (8), and AS 23.20.110 , for the purpose of compiling statewide workforce and education-related statistics and analyzing education and training outcomes. The commission may enter into cooperative agreements with state agencies, the University of Alaska, and other organizations to share data and information related to education and employment. The commission may not provide unit records to the federal government under this subsection. (c) The commission shall, for the purposes of this section and AS 14.42.030 (e)(7) and (8), remove personally identifiable information, including first name, last name, and middle name, social security number, student identification number, residential address, and mailing address, before placing the information in the database under (b) of this section. The commission is not required to remove the month or year of birth from a record under this subsection. (d) In this section, “unit record” means information pertaining to an individual. Sec. 14.42.040. Executive officer and staff; administration. (a) The commission may appoint an executive director as the commission's executive officer. The executive officer is a member of the exempt service under AS 39.25.110 , serves at the pleasure of the commission, and receives compensation fixed by the commission. The executive officer appoints persons to the staff positions authorized by the commission, and staff compensation is fixed by the commission. Each employee of the commission shall elect membership either in the state teachers' retirement system ( AS 14.25 ), if qualified, or in the public employees' retirement system ( AS 39.35 ). (b) The Alaska Commission on Postsecondary Education is not a division in the Department of Education and Early Development. The commission, its members, executive officer, and staff are in the Department of Education and Early Development for administrative support services only, and they are not subject to the direction of the commissioner of education and early development or the state Board of Education and Early Development. Sec. 14.42.045. Compensation and per diem. Members of the commission serve without compensation but are entitled to per diem and travel expenses as may be authorized by law for boards and commissions. Sec. 14.42.050. Legal counsel. (a) The attorney general is legal counsel for the commission. The attorney general shall advise the commission in legal matters arising in the discharge of its duties and represent the commission in actions to which it is a party. If, in the opinion of the commission, the public interest is not adequately represented by counsel in a proceeding, the attorney general, upon request of the commission, shall represent the public interest. (b) The commission may employ temporary legal counsel from time to time in matters in which the commission is involved. Sec. 14.42.055. Consortia. All parties that are signatory to a consortium agreement between the University of Alaska and a private university or college must abide by a decision rendered by the commission when disagreements arise or exist between the parties. For purposes of this section and AS 14.42.030 , “consortium” means a cooperative arrangement between two or more public or private institutions of postsecondary education specified in agreements or memoranda of understanding to permit sharing of facilities, instructional opportunities, and other educational services in such a way that the integrity of each institution party to the consortium is preserved while at the same time the institutions cooperatively plan the academic calendar, scheduling, use of personnel and facilities, and educational programs and offerings to the maximum advantage of the students and faculties of the institutions that are parties to a consortium. Article 2. Alaska Student Loan Corporation. Sec. 14.42.100. Creation of Alaska Student Loan Corporation. There is created the Alaska Student Loan Corporation. The corporation is a public corporation and government instrumentality within the Department of Education and Early Development but having a legal existence independent of and separate from the state. The corporation may not be terminated as long as it has bonds, notes, or other obligations outstanding. Upon termination of the corporation, its rights and property pass to the state. Sec. 14.42.110. Purpose of corporation. [Repealed, § 31 ch 63 SLA 2004.] Sec. 14.42.120. Corporation governing body. (a) The corporation shall be governed by a board of directors appointed by the governor consisting of two members of the Alaska Commission on Postsecondary Education, each of whom is selected for the commission under AS 14.42.015 (a)(1) — (2), (4) — (6), (8), or (9) and the commissioner of revenue, the commissioner of administration, and the commissioner of commerce, community, and economic development. Members of the board serve without compensation but the members who are also members of the Alaska Commission on Postsecondary Education are entitled to per diem and travel expenses authorized by law for boards and commissions under AS 39.20.180 . (b) The board shall elect a chairman from among its membership at its annual meeting each year. A majority of the members constitute a quorum for organizing the board, conducting its business, and exercising the powers of the corporation. Sec. 14.42.130. Meetings of the board. (a) The board shall meet at the call of its chairman and at other times as the board may determine in accordance with its regulations. (b) Public notice of a meeting of the board at which the issuance of corporation bonds is authorized shall be provided at least 24 hours before the meeting. Sec. 14.42.140. Minutes of meetings. The board shall keep minutes of each meeting and send a certified copy to the governor and to the Legislative Budget and Audit Committee. Sec. 14.42.150. Administration of affairs. The board shall manage the assets and business of the corporation and may adopt bylaws and regulations, in accordance with AS 44.62 (Administrative Procedure Act), governing the manner in which the business of the corporation is conducted and the manner in which its powers are exercised. The board shall delegate supervision of the administration of the corporation to the executive officer of the corporation. Sec. 14.42.160. Executive officer. The executive officer of the Alaska Commission on Postsecondary Education appointed under AS 14.42.040 (a) shall serve as executive officer of the corporation. The board shall prescribe the duties of the executive officer. Sec. 14.42.170. Staff. The employees of the Alaska Commission on Postsecondary Education shall serve as staff for the corporation. Sec. 14.42.190. Budget. The operating budget of the corporation is subject to AS 37.07 (Executive Budget Act). Sec. 14.42.200. General powers. In addition to other powers granted in this chapter, the corporation may (1) sue and be sued in its own name; (2) adopt an official seal; (3) adopt regulations under AS 44.62 (Administrative Procedure Act) to carry out the purposes of this chapter; (4) make and execute agreements, contracts, and other instruments necessary or convenient in the exercise of the powers and functions of the corporation, including contracts with a person or governmental entity; (5) receive, take, hold, and administer, on behalf of the corporation and for any of its purposes, any appropriation, gift, grant, bequest, devise, or donation of real property or personal property; in this paragraph, “property” includes (A) money; and (B) life estates, leases, or other interests in property; (6) borrow money as provided in this chapter to carry out its corporate purposes and issue its obligations as evidence of the borrowing, if that obligation of the corporation is not a debt of the state; (7) include in a borrowing the amounts to pay financing charges, interest on the obligations for a period not exceeding one year after the date on which the corporation estimates funds will otherwise be available to pay the interest, consultant, advisory, and legal fees, and other expenses necessary or incident to the borrowing; (8) invest or reinvest, subject to its contracts with noteholders and bondholders, money held by the corporation as set out in AS 37.10.071 ; (9) set and collect interest, fees, and charges in connection with education loans or repayment obligations held by the corporation and its servicing agents; in this paragraph, “charges” includes costs of financing by the corporation, service charges, insurance premiums, and other costs incurred by the corporation in carrying out its corporate purposes; (10) gather information on postsecondary education financial resources available to residents of this state and disseminate the information to reasonably assure that qualified residents are aware of those financial resources; (11) service education loans and repayment obligations held by the corporation; (12) finance, purchase, or participate in the financing or purchasing of education loans; (13) contract in advance for the financing, purchasing, or sale of education loans; (14) sell or participate in the sale, either public or private and on terms authorized by the board, of education loans to the Student Loan Marketing Association or to other purchasers; (15) collect and pay reasonable fees and charges in connection with the financing, purchase, sale, and servicing of education loans and repayment obligations; (16) enter into agreements with the federal government, including guaranty agreements and supplemental guaranty agreements as described in 20 U.S.C. 1001 — 1155, as amended, as necessary to provide for the receipt by the corporation of administrative allowances and other benefits available under 20 U.S.C. 1001 — 1155, as amended; (17) administer federal money allotted to the state involving insured education loans and related administrative costs and other matters; (18) enter into agreements with the commission relating to education loans and repayment obligations, the administration of the financial aid and loan programs under AS 14.43.091 — 14.43.750, 14.43.990, and AS 14.44 , and the payment of and security for bonds of the corporation; (19) to the extent permitted under contracts with bondholders, consent to the modification of the rate of interest, time of payment of an installment of principal or interest, or other terms of an education loan or repayment obligation held by the corporation; (20) procure insurance against any loss in connection with the operation of its programs; (21) provide advisory services to borrowers and other participants in the corporation's programs; (22) enter into credit facility agreements and make pledges, covenants, and agreements with respect to the repayment of borrowings under the credit facility agreements; (23) develop and implement education financing programs; in this paragraph, “programs” includes (A) programs listed in AS 14.42.030 (b)(1); (B) programs for the guaranteeing, servicing, originating, and financing of education loans for borrowers located both inside and outside the state; and (C) federal financial aid programs made under federal law; and (24) perform acts that may be necessary or appropriate to carry out effectively the general objectives and purposes of the corporation under AS 14.42.100 — 14.42.990. Sec. 14.42.205. Supplemental education loans: financing program. (a) The purpose of this section is to provide for supplemental education loan financing to assist qualified borrowers with unmet costs of attendance at a postsecondary institution approved by the commission. (b) The corporation may develop and establish a financing program for the Alaska supplemental education loan administered by the commission under AS 14.43.170 — 14.43.175. (c) The financing program established under (b) of this section (1) shall (A) provide that loans under the Alaska supplemental education loan program are medium-range and long-range fixed-rate and variable-rate loans; (B) require terms and conditions for loans under the Alaska supplemental education loan program as the corporation determines are useful and feasible; (C) be designed to (i) assist postsecondary institutions in this state in attracting and retaining students; (ii) maximize the amount of financing available by using private activity tax-exempt bond capacity as may be allocated by the state; and (2) except as limited by (1)(B) of this subsection, may provide for terms and conditions that are more attractive than prevailing terms and conditions available to students from other supplemental education lenders. Sec. 14.42.210. Education loan fund and program administration. (a) The education loan fund is established in the corporation. The education loan fund is a trust fund to be used to carry out the purposes of AS 14.42.100 — 14.42.990, AS 14.43.091 — 14.43.175, 14.43.600 — 14.43.700, 14.43.710 — 14.43.750, 14.43.990, and AS 14.44.025 . The fund consists of money or assets appropriated or transferred to the corporation for the fund and money or assets deposited in it by the corporation. The corporation may establish separate accounts in the fund. (b) Money and other assets of the education loan fund may be used to (1) secure bonds of the corporation; (2) pay the costs of administration of the fund; (3) invest in education loans and investments under AS 37.10.071 ; (4) finance programs approved under AS 14.43.091 — 14.43.175, 14.43.600 — 14.43.700, 14.43.710 — 14.43.750, or AS 14.44.040 ; and (5) pay the costs of administering and collecting the loans and repayment obligations under the financial aid programs listed in (4) of this subsection. (c) The financial aid programs listed in (b)(4) of this section shall be administered by the commission. The corporation and the commission may enter into agreements relating to the administration of the programs. The corporation may assign its rights under the agreements for the benefit and security of holders of its bonds. (d) The corporation may provide for terms and conditions for use of the education loan fund that are more favorable than prevailing terms and conditions available to students from other education lenders. Sec. 14.42.215. Interest. (a) The corporation shall set the interest rate on a loan financed by the corporation under AS 14.43.091 — 14.43.160, 14.43.170 — 14.43.175, 14.43.710 — 14.43.750, and AS 14.44.040 . Interest on a loan accrues from the time the loan is disbursed. (b) A borrower may elect to make payments of interest that accrues during the borrower's term of attendance at the postsecondary institution or during authorized deferment periods; however, any unpaid interest shall be capitalized as part of the principal to be repaid as agreed, or upon graduation, withdrawal, or completion of the deferment period. Sec. 14.42.220. Bonds of the corporation. (a) The corporation may borrow money and may issue bonds, on which the principal and interest are payable from its income and receipts or other assets or a designated part or parts of them. The corporation may use the proceeds of its bonds for any purposes that the corporation considers appropriate, including providing money to (1) make or purchase education loans; (2) finance programs identified in AS 14.42.210 ; (3) finance projects of the state as those projects may be identified by law; and (4) pay for any other purpose or program of the corporation that is authorized in AS 14.42.100 — 14.42.310. (b) Bonds may be authorized only by resolution of the board. Bonds shall be dated, bear interest at the rate or rates, be in the denominations, be in the form, either coupon or registered, carry the registration privileges, be executed in the manner, be payable in the medium of payment, at the place or places, be subject to the terms of redemption, and mature as provided by the resolution or a subsequent resolution. However, a bond may not mature more than 40 years after the date it is issued. (c) Bonds of the corporation, regardless of form or character, are negotiable instruments for all the purposes of AS 45.01 — AS 45.08 , AS 45.12 , AS 45.14 , and AS 45.29 (Uniform Commercial Code). (d) Bonds of the corporation may be sold at public or private sale in the manner, for the price or prices, and at the time or times that the board determines. (e) The superior court has jurisdiction to hear and determine proceedings relating to the corporation, including proceedings brought by or for the benefit of a bondholder or by a trustee for or other representative of a bondholder. (f) [Repealed, § 31 ch 63 SLA 2004.] (g) The corporation may not issue bonds to finance projects under (a)(3) of this section in an aggregate amount that exceeds $280,000,000. Sec. 14.42.230. Trust indentures and trust agreements. An issue of bonds by the corporation may be secured by a trust indenture or trust agreement between the corporation and a corporate trustee, which may be a trust company, bank, or national banking association, with corporate trust powers, located inside or outside the state, or by a secured loan agreement or other instrument or under a resolution giving powers to a corporate trustee by means of which the corporation may (1) enter into agreements with the trustee or the bondholders that the board determines to be necessary or desirable, including covenants, provisions, limitations, and other agreements as to the (A) application, investment, deposit, use, and disposition of the proceeds of bonds of the corporation or of money or other property of the corporation or in which it has an interest; (B) fixing and collecting of payments and other consideration for an education loan or repayment obligation; (C) assignment by the corporation of its rights in an education loan or repayment obligation or in a mortgage or other security interest created with respect to an education loan or repayment obligation to a trustee for the benefit of bondholders; (D) terms and conditions upon which additional bonds of the corporation may be issued; (E) vesting in a trustee of rights, powers, duties, funds, or property in trust for the benefit of bondholders, including the right to enforce payment, performance, and other rights of the corporation or of the bondholders, under an education loan or repayment obligation or a security interest created with respect to an education loan or repayment obligation; (2) pledge, mortgage, or assign money, agreements, property, or other assets of the corporation either presently in hand or to be received in the future, or both; and (3) provide for other matters that in any way affect the security or protection of the bonds. Sec. 14.42.240. Reserves and capital reserves. (a) For the purpose of securing one or more issues of bonds of the corporation, the board may establish one or more special funds, called “capital reserve funds,” and may pay into those capital reserve funds the proceeds of the sale of bonds and other money available to the corporation from other sources for the purposes of the capital reserve funds. A capital reserve fund may be established only if the board determines that the establishment of the fund would enhance the marketability of the bonds. Money in a capital reserve fund, except as provided in this section, may be used as required only for the (1) payment of the principal of, and interest on, bonds or of the sinking fund payments with respect to those bonds; (2) purchase or redemption of the bonds; or (3) payment of a redemption premium required to be paid when the bonds are redeemed before maturity. However, money in a capital reserve fund may not be withdrawn if the withdrawal would reduce the amount in the capital reserve fund to less than the capital reserve fund requirement, except for the purpose of making payment, when due, of principal, interest, or redemption premiums on the bonds when other money of the corporation is not available for the payments. Income or interest earned by, or increment to, a capital reserve fund, from the investment of all or part of the fund, may be transferred by the corporation to other funds or accounts of the corporation if the transfer does not reduce the amount of the capital reserve fund below the capital reserve fund requirement. (b) If the board decides to issue bonds secured by a capital reserve fund, the bonds may not be issued if the amount in the capital reserve fund is less than the capital reserve fund requirement, unless the corporation, at the time of issuance of the bonds, pledges to deposit in the capital reserve fund from the proceeds of the bonds to be issued or from other sources, an amount that, together with the amount then in the fund, is not less than the capital reserve fund requirement. (c) In computing the amount of a capital reserve fund for the purpose of this section, securities in which all or a portion of the fund is invested and credit facilities deposited in or credited to a capital reserve fund under (f) of this section shall be valued by a reasonable method established by the board by resolution or by trust indenture. Valuation shall include the amount of interest earned or accrued as of the date of valuation. (d) By January 15 of each year, the chairman of the board shall certify in writing to the governor and the legislature the amount, if any, required to restore a capital reserve fund to the capital reserve fund requirement. The legislature may appropriate to the corporation the amount certified by the chairman. The corporation shall deposit the amounts appropriated under this subsection during a fiscal year in the proper capital reserve fund. This subsection does not create a debt or liability of the state. (e) The board may establish reserve funds, other than capital reserve funds, to secure one or more issues of bonds of the corporation. The corporation may deposit in a reserve fund established under this subsection the proceeds of sale of its bonds and other money available from any other source. The corporation may allow a reserve fund established under this subsection to be depleted without complying with (d) of this section. (f) The corporation may hold in a capital reserve fund, in lieu of money and in satisfaction of all or part of a capital reserve fund requirement, irrevocable letters of credit issued by a commercial bank, surety bonds, insurance policies, and similar credit facilities. (g) In this section, “capital reserve fund requirement” means the amount required to be on deposit in the capital reserve fund as of the date of computation as determined by resolution of the board or by trust indenture. Sec. 14.42.250. Validity of pledge. It is the intention of the legislature that a pledge made in respect to bonds of the corporation shall be valid, perfected, and binding from the time the pledge is made; that the money or property so pledged and thereafter received by the corporation shall immediately be subject to the lien of the pledge without physical delivery or further act; and that the lien of the pledge shall be valid and binding as against all parties having claims of any kind in tort, contract, or otherwise against the corporation irrespective of whether the parties have notice. Neither the resolution, trust agreement, nor other instrument by which a pledge is created need be recorded or filed under the provisions of AS 45.01 — AS 45.08 , AS 45.12 , AS 45.14 , and AS 45.29 (Uniform Commercial Code) to be valid, perfected, binding, or effective. Sec. 14.42.260. Nonliability on bonds. (a) The members of the board and individuals executing the bonds of the corporation are not liable personally on the bonds or subject to personal liability or accountability by reason of the issuance of the bonds. (b) The bonds issued by the corporation do not constitute an indebtedness or other liability of the state or of a political subdivision of the state, except the corporation, but shall be payable solely from the income and receipts or other funds or property of the corporation. The corporation may not pledge the faith or credit of the state, or of a political subdivision of the state, except the corporation, to the payment of a bond. Issuance of a bond by the corporation does not directly, indirectly, or contingently obligate the state or a political subdivision of the state to apply money from, or levy or pledge any form of taxation whatever to the payment of the bond. Sec. 14.42.265. Underwriters. The board may select one or more underwriters for its bonds in accordance with procedures (1) for the award of a contract under AS 36.30.200 — 36.30.260; or (2) adopted by regulations of the board that are based on the competitive principles of AS 36.30.200 — 36.30.260 and are adapted to the special needs of the corporation in the selling of its bonds as determined by the board. Sec. 14.42.270. Pledge and agreement of state. The state pledges to and agrees with holders of bonds issued by the corporation that the state will not limit or alter the rights and powers vested in the corporation under AS 14.42.100 — 14.42.990 to fulfill the terms of a contract made by the corporation with the bondholders or in any way impair the rights and remedies of the bondholders until the bonds, together with the interest on them with interest on unpaid installments of interest, and all costs and expenses in connection with an action or proceeding by or on behalf of the bondholders, are fully met and discharged. The corporation may include this pledge and agreement of the state in a contract with bondholders. Sec. 14.42.280. Exemption from taxation. The real and personal property of the corporation and its assets, income, and receipts are declared to be the property of a political subdivision of the state and devoted to an essential public and governmental function and purpose, and the property, assets, income, receipts, and other interests of the corporation are exempt from all taxes and special assessments of the state or a political subdivision of the state, including municipalities, school districts, public utility districts, and other governmental units. Bonds of the corporation are declared to be issued by a political subdivision of the state and for an essential public and governmental purpose, and the bonds, interest on them, income from them, and transfer of them, and all assets, income, and receipts pledged to pay or secure the payment of the bonds, or interest on them, are exempt from taxation by or under the authority of the state, except for inheritance and estate taxes and taxes on transfers by or in contemplation of death. Sec. 14.42.290. Bonds legal investments for fiduciaries. The bonds of the corporation are securities in which public officers and bodies of the state, municipalities, insurance companies, insurance associations, other persons carrying on an insurance business, banks, bankers, trust companies, savings banks, savings associations, building and loan associations, investment companies, other persons carrying on a banking business, administrators, guardians, executors, trustees, other fiduciaries, and other persons who are authorized to invest in bonds or other obligations of the state, may properly and legally invest funds including capital in their control or belonging to them. Notwithstanding any other provisions of law, the bonds of the corporation are also securities that may be deposited with and may be received by public officers and bodies of the state and municipalities for any purpose for which the deposit of bonds or other obligations of the state is now or may be authorized. Sec. 14.42.295. Payment to state. (a) The board may elect to pay the state a return of contributed capital, or a dividend, for each base fiscal year that the corporation's net income equals or exceeds $2,000,000. The payment may not be less than 10 percent nor more than 35 percent, as approved by the board, of the corporation's net income for the base fiscal year, and is subject to the provisions of any applicable bond indentures of the corporation. If a payment is authorized under this section, payment must be made available by the corporation before the end of the fiscal year in which payment has been authorized. The corporation shall notify the commissioner of revenue when the amount of the payment authorized under this section is available for appropriation. (b) In this section, (1) “base fiscal year” means the fiscal year ending two years before the end of the fiscal year in which a payment under this section is to be made available; (2) “contributed capital” means the assets appropriated by sec. 2, ch. 93, SLA 1987, in the form of unrestricted receipts of loans; (3) “dividend” means return of surplus as reflected in the equity section of the corporation's audited financial statements for the education loan fund ( AS 14.42.210 ); (4) “net income” means the corporation's net income as set out in the audited financial statements of the corporation for the base fiscal year. Sec. 14.42.300. Operation of certain statutes excepted. (a) The corporation is not a municipality as the term is defined in AS 01.10.060 . Except as provided in AS 14.42.190 , the corporation is not subject to AS 37 . For all other purposes the corporation is a political subdivision and an instrumentality of the state. (b) The funds, income, and receipts of the corporation are not money of the state, nor may real property in which the corporation has an interest be considered land owned in fee by the state or to which the state may become entitled or in any way land belonging to the state, or state land referred to in art. VIII of the Alaska Constitution. Sec. 14.42.310. Annual audit. The financial records of the corporation shall be audited annually by the legislative auditor or by a certified public accountant approved by the legislative auditor. The legislative auditor may prescribe the form and content of the financial records of the corporation and shall have access to these records at any time. Sec. 14.42.390. Definitions. [Repealed, § 42 ch 85 SLA 2001.] Article 3. General Provisions. Sec. 14.42.990. Definitions. In this chapter, unless the context requires otherwise, (1) “board” means the board of directors of the corporation; (2) “commission” means the Alaska Commission on Postsecondary Education created in AS 14.42.015 ; (3) “corporation” means the Alaska Student Loan Corporation created in AS 14.42.100 ; (4) “education loan” means a loan that is eligible for financing or is financed from the education loan fund established in AS 14.42.210 ; (5) “eligible student” means an individual who meets the eligibility requirements established by the federal guaranteed student loan program or as otherwise set out in this chapter; (6) “federal guaranteed student loan program” means the programs of the United States government that make postsecondary educational financial aid available under 20 U.S.C. 1070 — 1099c-2, as amended; (7) “repayment obligation” means an obligation to repay financial support that is financed from the education loan fund established in AS 14.42.210 or otherwise administered by the commission.