AS Title 16, Chapter 10: Fisheries and Fishing Regulations

Article 1. Interference with Streams and Waters. Chapter 10. Fisheries and Fishing Regulations. Sec. 16.10.010. Interference with salmon spawning streams and waters. (a) A person may not, without first applying for and obtaining a permit or license from the Department of Environmental Conservation, (1) obstruct, divert, or pollute waters of the state, either fresh or salt, utilized by salmon in the propagation of the species, by felling trees or timber in those waters, casting, passing, throwing, or dumping tree limbs or foliage, underbrush, stumps, rubbish, earth, stones, rock, or other debris, or passing or dumping sawdust, planer shavings, or other waste or refuse of any kind in those waters; (2) erect a dam, barricade, or obstruction to retard, conserve, impound, or divert the waters described in (1) of this subsection to prevent, retard, or interfere with the free ingress or egress of salmon into those waters in the natural spawning or propagation process; (3) render the waters described in (1) of this subsection inaccessible or uninhabitable for salmon for spawning or propagation. (b) The application for the permit or license referred to in (a) of this section must set out the name and style of the person or concern, describe the waters and location, and state in particular the plans, purpose, and intention for which the application is made. Sec. 16.10.020. Grounds for permit or license. If in the judgment of the Department of Environmental Conservation, the purpose of the applicant for the permit or license is to develop power, obtain water for civic, domestic, irrigation, manufacturing, mining, or other purposes tending to develop the natural resources of the state, the department may grant the permit or license and may require the applicant to construct and maintain adequate fish ladders, fishways, or other means by which fish may pass over, around, or through the dam, obstruction or diversion in the pursuit of the propagation or spawning process. Sec. 16.10.030. Penalty for violation of AS 16.10.010 — 16.10.050. A person who violates AS 16.10.010 — 16.10.050 is guilty of a misdemeanor and, upon conviction, is punishable by a fine of not less than $100 nor more than $500. Sec. 16.10.040. Disposition of money received for fines and penalties. The proceeds of all fines and penalties imposed under AS 16.10.010 — 16.10.050 shall be paid into the general fund and they shall be immediately available for expenditure by the Department of Fish and Game. Sec. 16.10.050. Construction of AS 16.10.010 — 16.10.050. AS 16.10.010 — 16.10.050 do not affect the vested rights or privileges granted by federal statute to any person. Article 2. Interference with Commercial Fishing Gear. Sec. 16.10.055. Interference with commercial fishing gear. A person who wilfully or with reckless disregard of the consequences, interferes with or damages the commercial fishing gear of another person is guilty of a misdemeanor. For the purposes of this section “interference” means the physical disturbance of gear which results in economic loss or loss of fishing time, and “reckless disregard of the consequences” means a lack of consideration for the consequences of one's acts in a manner that is reasonably likely to damage the property of another. Article 3. Fish Traps and Other Illegal Fishing Devices. Sec. 16.10.060. Prohibition against use of fish traps. [Repealed, § 27 ch 127 SLA 1974.] Sec. 16.10.070. Operation of fish traps. Fish traps, including but not limited to floating, pile-driven, or hand-driven fish traps, may not be operated in the state on or over state land, tideland, submerged land, or water. This section does not prevent the operation of small hand-driven fish traps of the type ordinarily used on rivers of the state that are otherwise legally operated in or above the mouth of a stream or river. Sec. 16.10.080. Federal compact exempted. AS 16.10.070 may not be construed to violate sec. 4, P.L. 85-508 (72 Stat. 339) (Alaska Statehood Act), which constitutes a compact between the United States and Alaska, under which the state disclaims all right and title to land or other property (including fishing rights), the right or title to which may be held by Indians, Eskimos, or Aleuts, hereafter referred to as Natives, or which is held by the United States in trust for these Natives. Sec. 16.10.090. Penalty for violation of AS 16.10.070 . A person who violates AS 16.10.070 is guilty of a misdemeanor and is punishable by imprisonment for not more than one year, or by a fine of not more than $5,000 or by both. Sec. 16.10.100. Erection of fish traps prohibited on land or water owned by state. Fish traps, including but not limited to floating, pile-driven, or hand-driven fish traps, may not be erected, moored, or maintained on or over land, tideland, submerged land, or water owned or otherwise acquired by the state. This section does not prevent the maintenance, use, or operation of small, hand-driven fish traps of the type ordinarily used on rivers of the state which are otherwise legally maintained and operated in or above the mouth of a stream or river. Sec. 16.10.110. Penalty for violation of AS 16.10.100 . A person who violates AS 16.10.100 is guilty of a misdemeanor and is punishable by imprisonment for not more than one year or by a fine of not more than $5,000, or by both. Sec. 16.10.120. Use of drum or reel in operation of purse seine. A person may not use, employ, or operate a drum or reel around which a purse seine is coiled, rolled, or looped for purposes of taking or removing fish from a body of water located on or over land or tideland owned by the state or over which the state has jurisdiction. This section does not prevent the use of power blocks or the use of a reel mounted on a seine skiff to haul in or let out the separate purse seine lead which is temporarily connected to the purse seine proper, as these terms are generally employed or used in the fishing industry. Sec. 16.10.125. Use of termination device on shellfish and bottom fish pot required. The Board of Fisheries shall, by regulation, prescribe a termination device or devices for all shellfish and bottom fish pots. In this section “termination device” means a biodegradable seam or panel or other device that renders the pot incapable of holding shellfish or bottom fish for more than six months when it is continuously immersed in sea water. Sec. 16.10.130. Penalty for violation of AS 16.10.120 or 16.10.125. A person who violates AS 16.10.120 or 16.10.125 is guilty of a misdemeanor, and upon conviction is punishable by imprisonment for not more than six months, or by a fine of not more than $1,000, or by both. Secs. 16.10.140 — 16.10.160. Taking of herring spawn. [Repealed, § 2 ch 91 SLA 1970.] Article 4. Utilization of Pollock and Herring. Sec. 16.10.164. Policy on utilization of pollock. The legislature declares that stripping roe from pollock without utilizing the flesh is wasteful and does not constitute utilization of this resource for the maximum benefit of the people. Therefore, it is the policy of the state that (1) roe stripping be eliminated to the fullest extent possible; and (2) pollock taken in a commercial fishery should be utilized for human consumption to the fullest extent practicable. Sec. 16.10.165. Utilization of groundfish taken in a commercial fishery. (a) Unless otherwise provided by law, a person may not recklessly waste or cause to be wasted groundfish taken in a commercial fishery. (b) The Board of Fisheries may adopt regulations under AS 44.62 (Administrative Procedure Act) it considers necessary for implementation of this section. The board may delegate its authority under this section to the commissioner. (c) A person who violates this section is guilty of a class A misdemeanor. (d) Each day on which a violation of this section occurs is a separate violation. (e) In this section (1) “flesh” means all muscular body tissue surrounding the skeleton; (2) “groundfish” means (A) pollock; or (B) other species of groundfish designated by the Board of Fisheries under authority of this section; (3) “person” includes a joint venture; (4) “waste” means the failure to use the flesh of groundfish for human consumption, reduction to meal, production of food for domestic animals or fish, bait, or scientific, display, or educational purposes; “waste” does not include normal, inadvertent loss of flesh associated with processing that cannot be prevented by practical means. Sec. 16.10.172. Legislative policy on utilization of herring. The legislature finds the following: (1) extensive and valuable herring populations are available for harvest in waters subject to the jurisdiction of the state; (2) commercial markets are available for herring processed in several forms; (3) one processing technique presently employed involves deliberately permitting decomposition of the herring carcass to allow for removal and subsequent sale of the roe product, with the consequence that the flesh is unusable and discarded. The legislature declares that the process referred to in (3) of this section is wasteful and does not constitute utilization of this resource for the maximum benefit of the people. Therefore, it is the policy of the legislature that this process should be eliminated to the fullest extent possible. Sec. 16.10.173. Utilization of commercially taken herring. (a) A person may not waste or cause to be wasted any commercially taken herring. (b) The Board of Fisheries may adopt regulations under AS 44.62 (Administrative Procedure Act) it considers necessary for implementation of this section. The board may delegate its authority under this section to the commissioner. (c) The provisions of this section do not apply to herring taken commercially in the Bering Sea (including appurtenant bays, sounds, estuaries, and water of the state) north of 56° North Latitude, until January 1, 1979. (d) In this section, (1) “flesh” means all muscular body tissue surrounding the bony skeleton of the herring; (2) “person” has the meaning given in AS 01.10.060 and also includes a joint venture; (3) “waste” means the failure to use the flesh of commercially taken herring for reduction to meal, production of fish food, human consumption, food for domestic animals, scientific or educational purposes, or round herring bait. Normal, inadvertent loss of flesh associated with the uses described in this subsection that cannot be prevented by practical means does not constitute waste. The commissioner may authorize other uses of commercially taken herring consistent with the intent of this section and AS 16.10.172 upon receipt of a request accompanied by a detailed justification. (e) A person who violates this section is guilty of a class A misdemeanor. Sec. 16.10.175. Removal of herring from state. (a) A person may not remove herring from the state before the herring has been frozen or otherwise processed for shipment. (b) In this section, “processed for shipment” includes, but is not limited to, icing, stripping, or salting of the herring; however, it does not include salting of the herring if five percent or more of the body weight of the herring consists of roe. Article 5. Migratory Fish and Shellfish. Sec. 16.10.180. Legislative findings. The legislature finds and recognizes these facts: (1) migratory fish and migratory shellfish are present in commercial quantities inside and outside the territorial waters of the state; (2) migratory fish and migratory shellfish taken from the waters of the state are indistinguishable, in most cases, from those taken from the adjacent high seas; (3) substantial quantities of migratory fish and migratory shellfish move inshore and offshore intermittently and at various times during a given year and in so doing often enter and leave territorial waters of the state; (4) to conserve the migratory fish and migratory shellfish found inside the waters of the state it is necessary to strictly enforce local laws and regulations; (5) by making certain laws and regulations enacted or adopted for the regulation of the coastal fishery applicable to the adjacent high sea areas, enforcement of these laws and regulations is facilitated; (6) conservation regulations should not be adopted to impose economic sanctions. Sec. 16.10.190. Regulations. The Board of Fisheries may adopt regulations to carry out the purposes of AS 16.10.180 — 16.10.230 defining the adjacent high sea areas, migratory fish, and migratory shellfish and to make coastal fishery regulations governing the manner, means, conditions, and time for the taking of migratory fish and migratory shellfish applicable in designated adjacent high sea areas. Sec. 16.10.200. Unlawful taking prohibited. A person taking migratory fish and migratory shellfish in high sea areas designated by the Board of Fisheries or in violation of the regulations adopted by the Board of Fisheries governing the taking of migratory fish and migratory shellfish in the designated areas may not possess, sell, offer to sell, barter, offer to barter, give, or transport in the state, including the waters of the state, migratory fish or migratory shellfish. Sec. 16.10.210. Unlawful sale or offer prohibited. A person may not possess, purchase, offer to purchase, sell, or offer to sell in the state migratory fish or migratory shellfish taken on the high seas knowing that they were taken in violation of a regulation adopted by the Board of Fisheries governing the taking of migratory fish or migratory shellfish in certain areas designated by the Board of Fisheries or the commissioner. Sec. 16.10.220. Penalty for violation of AS 16.10.200 and 16.10.210. A person who violates AS 16.10.200 and 16.10.210 is guilty of a misdemeanor, and upon conviction is punishable by a fine of not more than $5,000 or by imprisonment for not more than one year, or by both. Sec. 16.10.230. Exemptions. AS 16.10.180 — 16.10.220 do not apply to (1) the use of nets for fishing for or taking salmon for the purposes of scientific investigation authorized by state law; and (2) existing laws and regulations prohibiting the taking of salmon by means of nets on the high seas. Article 6. Transportation of Fish and Shellfish. Sec. 16.10.240. Transportation of live crab. (a) A person may not take out of or ship, transport, or send from this state any commercially taken live crab, unless the crab have been landed in a port in the state and recorded on a fish ticket form prescribed by the department. (b) Notwithstanding (a) of this section, live crab may be taken, shipped, transported, or sent from the state by means of surface transportation only if the crab are taken at a time and location in the state for which the Department of Environmental Conservation does not require seafood processors to test crab for the presence of marine toxins. Sec. 16.10.250. Penalty. A person, association, or corporation violating AS 16.10.240 or contributing to or cooperating in the violation of AS 16.10.240 is guilty of a misdemeanor, and upon conviction is punishable by a fine of not more than $5,000, or by imprisonment for not more than one year, or by both. Each unlawful removal of live crab is a separate offense. Vessels and equipment used in or in aid of a violation of AS 16.10.240 may be seized and disposed of as provided in AS 16.05.190 . Conviction under AS 16.10.240 is grounds for suspension of a fishing license or permit by the department. Article 7. Purchase of Fish. Sec. 16.10.265. Purchase of fish from permit holders. (a) An individual may not, while acting as a fish processor or primary fish buyer, or as an agent, director, officer, member, or employee of a fish processor, of a primary fish buyer, or of a cooperative corporation organized under AS 10.15 , intentionally or knowingly make an original purchase of fish from a seller who does not hold (1) a landing permit, an entry permit, or an interim-use permit; or (2) a fish transporter permit under AS 16.05.671 . (b) An individual who violates (a) of this section is (1) upon a first conviction, guilty of a class B misdemeanor and shall be sentenced to a fine of not less than $1,000 nor more than $5,000, and may be sentenced to a definite term of imprisonment of not more than 90 days; (2) upon a second conviction, guilty of a class A misdemeanor and shall be sentenced to a fine of not less than $5,000 nor more than $10,000, and may be sentenced to a definite term of imprisonment of not more than one year; (3) upon a third or subsequent conviction, guilty of a class A misdemeanor and shall be sentenced to a fine of not less than $10,000 nor more than $25,000, and may be sentenced to a definite term of imprisonment of not more than one year. (c) The commissioner of revenue shall impose upon a fish processor, primary fish buyer, or cooperative corporation organized under AS 10.15 , a civil fine equal to the value of fish purchased in violation of this section by (1) the fish processor or primary fish buyer if the fish processor or primary fish buyer is not a corporation; or (2) a director, officer, or employee in a policy-making position of the fish processor, of the primary fish buyer, or of the cooperative corporation. Value is based on the average price paid to fishermen at the time of the violation. (d) The commissioner of commerce, community, and economic development may suspend or revoke a business license issued under AS 43.70.020 and the commissioner of revenue may suspend or revoke a license to engage in the business of processing or buying raw fish if the licensee or an officer, director, or employee in a policy-making position of the licensee has been convicted of three offenses under this section. Proceedings to suspend or revoke a license are governed by AS 44.62 (Administrative Procedure Act). (e) An organization may not be criminally prosecuted under (a) of this section. (f) In this section, “individual” means a natural person. Sec. 16.10.267. Possession of permit and identification by seller. (a) When a fisherman sells fish, the fisherman shall possess (1) a landing permit, entry permit, or interim-use permit issued or transferred to the fisherman under AS 16.43 , or other document authorized by regulation to be used in place of an entry permit or interim-use permit; and (2) an identification card that has been issued to the fisherman by a state or federal agency or other organization designated by the Department of Public Safety and that bears a photograph of the fisherman. (b) If requested by the purchaser of the fish or by a peace officer, the fisherman or fish transporter shall present for inspection the identification card, entry permit, interim-use permit, fish transporter permit, or other document required to be in the fisherman's or the fish transporter's possession under (a) or (d) of this section. (c) Examples of a suitable identification card required under (a)(2) and (d)(2) of this section are a motor vehicle operator's license issued under AS 28.15.111 , an identification card issued under AS 18.65.310 , and an identification card issued under AS 33.30.105 . (d) When a fish transporter sells fish as the agent of the commercial fisherman who caught the fish, the fish transporter shall possess (1) a fish transporter permit and the fish ticket completed by the fish transporter under AS 16.05.671 (d); and (2) an identification card that has been issued to the fish transporter by a state or federal agency or other organization designated by the Department of Public Safety and that bears a photograph of the fish transporter. (e) A person who violates this section is, upon conviction, guilty of a class B misdemeanor and may be sentenced to a definite term of imprisonment of not more than 90 days. In addition (1) upon a first conviction for a violation of this section, the court may sentence the convicted person to pay a fine of not more than $5,000 and may order the loss of commercial fishing privileges for a period of not more than three years from the date of conviction; (2) upon a second conviction for a violation of this section, the court may sentence the convicted person to pay a fine of not more than $10,000 and may order the loss of commercial fishing privileges for a period of not more than three years from the date of conviction; (3) upon a third or subsequent conviction for a violation of this section, the court (A) may sentence the convicted person to pay a fine of not more than $10,000; and (B) shall order that the convicted person lose commercial fishing privileges for a period of three years from the date of conviction. Sec. 16.10.268. Notice of liability. (a) The commissioner of labor and workforce development shall print posters that contain notice of the requirements of AS 16.10.265 . The commissioner shall distribute the posters to fish processors, primary fish buyers, and cooperative corporations organized under AS 10.15 for the purpose of buying fish. (b) A fish processor, primary fish buyer, or cooperative corporation organized under AS 10.15 for the purpose of buying fish shall display in a prominent place on its business premises posters provided by the commissioner of labor and workforce development under (a) of this section. Sec. 16.10.269. Limitations. AS 16.10.265 and 16.10.267 do not apply to the purchase or sale of aquatic farm products from a holder of a permit issued under AS 16.40.100 or stock from a holder of a permit issued under AS 16.40.120 . Sec. 16.10.270. Purchase of fish by the pound. (a) A fish processor or primary fish buyer shall purchase raw fish by the pound. The poundage of the fish to be purchased shall be determined by weighing the fish unless both the buyer and seller agree in writing upon a sample weighing technique that will fairly determine the average weight of the fish purchased. (b) A person who violates this section is guilty of a misdemeanor and upon conviction is punishable by imprisonment for not more than one year, or by a fine of not more than $5,000, or by both. Sec. 16.10.275. Regulations. The commissioner may adopt regulations to carry out the provisions of AS 16.10.270 — 16.10.296. Sec. 16.10.277. Posting of current salmon price. [Repealed, § 1 ch 13 SLA 1997.] Sec. 16.10.280. Price disputes between fishermen and fish processors. In an area where a price dispute exists between at least one-third of the registered commercial fishermen for that area, as estimated by the Department of Fish and Game on the basis of information available to the department, and fish processors on the price to be paid for salmon, and no agreement has been reached up to 120 days before the opening of the salmon fishing season in that area, a representative from the Department of Labor and Workforce Development shall intervene as mediator of the dispute upon request of either party. Sec. 16.10.290. Security for collection of wages and payment for raw fish. [Repealed, § 4, E.O. No. 85 (1993).] Sec. 16.10.291. Exemption from bonding requirements. [Renumbered as AS 16.10.293 (a).] Secs. 16.10.292 , 16.10.293. Filing evidence of compliance; exemptions from bonding requirement. [Repealed, § 4, E.O. No. 85 (1993).] Sec. 16.10.294. Administrative and judicial orders. (a) [Repealed, § 4, E.O. No. 85 (1993).] (b) [Repealed, § 4, E.O. No. 85 (1993).] (c) [Repealed, § 4, E.O. No. 85 (1993).] (d) [Repealed, § 4, E.O. No. 85 (1993).] (e) If the commissioner determines that a fish processor or primary fish buyer is acting in violation of AS 16.10.270 — 16.10.280, the commissioner shall give written notice prohibiting further action by the person as a fish processor or primary fish buyer. The prohibition continues until the person has submitted evidence acceptable to the commissioner showing that the violation has been corrected. (f) A person affected by an order issued under AS 16.10.265 — 16.10.296 may seek equitable relief preventing the commissioner from enforcing the order. (g) In an action instituted in the superior court by the commissioner or a representative of the commissioner, a person acting in the capacity of a fish processor or primary fish buyer in violation of AS 16.10.265 — 16.10.296 may be enjoined from acting as a fish processor or primary fish buyer. Sec. 16.10.295. Penalty. [Repealed, § 4, E.O. No. 85 (1993).] Sec. 16.10.296. Definitions. In AS 16.10.265 — 16.10.296, unless the context otherwise requires, (1) “commissioner” means the commissioner of labor and workforce development; (2) “fish” means any species of aquatic finfish, invertebrates and amphibians, shellfish, or any other raw fishery resource, in any stage of its life cycle, found in or introduced into the state, and includes fish eggs except fish eggs sold for stock enhancement purposes; (3) “fish processor” means a person engaging or attempting to engage in a business for which a license is required under AS 43.75 ; (4) “primary fish buyer” means a person, other than a cooperative corporation organized under AS 10.15 , engaging or attempting to engage in the business of originally purchasing or buying any fishery resource in intrastate, interstate, or foreign commerce. Article 8. Commercial Fishing Loan Act. Sec. 16.10.300. Declaration of policy. It is the policy of the state, under AS 16.10.300 — 16.10.370, to promote the rehabilitation of the state's fisheries, the development of a predominantly resident fishery, and the continued maintenance of commercial fishing gear and vessels throughout the state by means of long-term low interest loans. Sec. 16.10.310. Powers of the department. (a) The department may (1) make loans (A) to individual commercial fishermen who have been state residents for a continuous period of two years immediately preceding the date of application for a loan under AS 16.10.300 — 16.10.370, who have had an annual crewmember or commercial fishing license under AS 16.05.480 or a permit under AS 16.43 for the year immediately preceding the date of application and any other two of the past five years, and who actively participated in the fishery during those periods (i) for the purchase of entry permits; (ii) to upgrade existing vessels and gear for the purpose of improving the quality of Alaska seafood products; or (iii) for propulsion engine or generator engine replacements on existing vessels for the purpose of improving fuel efficiency; (B) to an individual for the repair, restoration, or upgrading of existing vessels and gear, for the purchase of entry permits and gear, and for the construction and purchase of vessels, if the individual has been a state resident for a continuous period of two years immediately preceding the date of application for a loan under AS 16.10.300 — 16.10.370, is not eligible for financing from a state financial institution as defined in AS 06.01.050 , a federally chartered financial institution, or the Commercial Fishing and Agricultural Bank, and (i) because of lack of training or lack of employment opportunities in the area of residence, does not have occupational opportunities available other than commercial fishing; or (ii) is economically dependent on commercial fishing for a livelihood and for whom commercial fishing has been a traditional way of life in Alaska; (C) for the purchase of quota shares for fisheries in or off the state by individual commercial fishermen who (i) have been state residents for a continuous period of two years immediately preceding the date of application for a loan under AS 16.10.300 — 16.10.370; (ii) for any two of the past five years, possessed an annual crewmember or commercial fishing license under AS 16.05.480 or a permit under AS 16.43 and actively participated in a fishery for which the license or permit was issued; (iii) qualify as transferees for quota shares under applicable law; and (iv) are not eligible for financing from other recognized commercial lending institutions to purchase quota shares; (D) to an individual commercial fisherman to satisfy past due federal tax obligations, if the fisherman has been a state resident for a continuous period of two years immediately preceding the date of application for the loan, has filed past and current federal tax returns with the federal government, has executed an agreement with the federal government for repayment of past due federal tax obligations, and either (i) because of lack of training or lack of employment opportunities in the area of residence, does not have occupational opportunities available other than commercial fishing; or (ii) is economically dependent on commercial fishing for a livelihood and for whom commercial fishing has been a traditional way of life in Alaska; (E) for the purchase of fishing quota shares by a community quota entity eligible under federal statute or regulation to purchase the fishing quota shares if the community quota entity is not eligible or qualified for financing from other recognized commercial lending institutions to purchase the fishing quota shares; (F) to an individual for the upgrade of existing tender vessels and gear to improve the quality of Alaska seafood products, if the individual has been a state resident for a continuous period of two years immediately preceding the date of application for a loan under AS 16.10.300 — 16.10.370; (2) designate agents and delegate its powers to them as necessary; (3) adopt regulations necessary to carry out the provisions of AS 16.10.300 — 16.10.370, including regulations to establish reasonable fees for services provided; (4) establish amortization plans for repayment of loans, which may include extensions for poor fishing seasons or for adverse market conditions for Alaska products; (5) enter into agreements with private lending institutions, other state agencies, or agencies of the federal government to carry out the purposes of AS 16.10.300 — 16.10.370; (6) enter into agreements with other agencies or organizations to create an outreach program to make loans under AS 16.10.300 — 16.10.370 in rural areas of the state; (7) allow an assumption of a loan if (A) the applicant has been a state resident for a continuous period of two years immediately preceding the date of the request for an assumption; and (B) approval of the assumption would be consistent with the purposes of AS 16.10.300 ; an applicant for a loan assumption may not be disqualified because the applicant does not meet the loan eligibility requirements of (1) of this subsection; (8) prequalify loan applicants for a limited entry permit loan or a quota shares loan and charge a fee not to exceed $200 for prequalification; (9) charge and collect the fees established under this subsection; (10) refinance a debt obligation incurred by a borrower or borrowers under this section if the borrower or borrowers otherwise qualify for a loan under AS 16.10.300 — 16.10.370; (11) [See delayed amendment note.] refinance debt obligations, not to exceed $400,000, incurred by a borrower or borrowers for the purchase of a commercial fishing vessel or gear if the borrower or borrowers otherwise qualify for a loan under AS 16.10.300 — 16.10.370; the department may collect a refinancing loan origination charge as provided by regulation. (b) [Repealed, § 34 ch 79 SLA 1985.] (c) In determining whether an individual commercial fisherman is reasonably likely to be able to repay a loan made under AS 16.10.300 — 16.10.370, the commissioner shall consider the individual commercial fisherman's income from commercial fishing and from all other sources. (d) [Repealed, § 9 ch 62 SLA 1994.] (e) [Repealed, § 4 ch 12 SLA 2000.] Sec. 16.10.315. Allocation of loans. [Repealed, § 4 ch 100 SLA 2006.] Sec. 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) may not exceed a term of 15 years, except for extensions under AS 16.10.310 (a)(4); (2) may not bear interest (A) exceeding the prime rate, as defined by AS 44.88.599 , plus two percentage points; or (B) at a rate of more than 5.25 percent a year; (3) must be secured by a first priority lien and appropriate security agreement; (4) may not exceed 80 percent of the appraised value of the collateral used to secure the loan; and (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) may not exceed a term of 25 years, except for extensions under AS 16.10.310 (a)(4); (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) may have terms that allow for a community quota entity to defer interest payments for up to two years; and (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. Sec. 16.10.325. Guarantors. A person may act as guarantor if the borrower has insufficient collateral to secure a loan for the purposes described in AS 16.10.310 (a)(1)(B) or (C). The loan agreement shall specifically describe the property of the guarantor to be used as collateral by the borrower and shall be signed by the guarantor and the borrower. The department shall provide the guarantor with a copy of all notices sent to the borrower by the department. If the loan is for the purchase of an entry permit or quota shares, the guaranty by the guarantor may not constitute a lien, mortgage, or encumbrance on or pledge of the entry permit or quota shares. Sec. 16.10.330. Sale or transfer of mortgages, bonds and notes. [Repealed, § 14 ch 122 SLA 1980.] Sec. 16.10.333. Loans for purchase of Alaska limited entry permits. (a) Loans under AS 16.10.310 (a) may be made to an individual commercial fisherman for the purchase of a limited entry permit upon certification by the commission that the fisherman is a person who qualifies as a transferee for the permit under AS 16.43 and the regulations adopted by the commission. (b) Upon approval by the commissioner, the permit to be purchased may be pledged as security for a loan under (a) of this section, if (1) the certificate for the pledged permit lists the commissioner as the legal owner of the permit; (2) the certificate for the pledged permit lists the debtor as the equitable owner of the permit; (3) all annual permit cards issued under the pledged permit list the name of the debtor; (4) all obligations and responsibilities of a permit owner are assumed by the debtor; (5) co-signers or other sureties for performance under the note are not vested with any rights in the pledged permit and their obligation is limited to satisfaction of the note and payment of costs directly incurred by the department in administering the loan. (c) The commissioner is not liable for any act or omission resulting from permit ownership nor will that act or omission affect the commissioner's title to the permit or the commissioner's rights under it. (d) Upon satisfaction of the note by the debtor, the commissioner shall certify to the commission that the note has been satisfied. (e) Upon certification as provided in (d) of this section, the commission shall amend the permit certificate to list the debtor as the legal owner. (f) [Repealed, § 34 ch 79 SLA 1985.] Sec. 16.10.335. Default and foreclosure. (a) If the debtor defaults upon a note for which a limited entry permit has been pledged as security under AS 16.10.333 or 16.10.338, the commissioner shall provide the debtor, by both certified and first class mail sent to the debtor's last known address on file with the commissioner, with a notice of default that includes (1) a description of the security given for the note including the number assigned to the pledged permit by the commission; (2) the date upon which the default occurred; (3) the amount of the debtor's outstanding principal and interest as of the date of the default notice, the total amount remaining on the note less unearned interest, and the amount of daily interest; (4) a statement that the debtor may, within 15 days after the postmark date of the notice, request a hearing to submit evidence showing the debtor has not defaulted; (5) a statement that the note may be reinstated if it is brought current within 120 days after the postmark date of the notice; (6) a statement that, under AS 16.10.310 (a)(4), the debtor may reinstate the note by submitting to the commissioner a plan of repayment if the commissioner accepts the debtor's plan of repayment; (7) the place where reinstatement of the note or payment in full may be made; and (8) a notice in at least 10-point bold type stating: IMPORTANT: YOUR FAILURE TO REINSTATE OR PAY THIS NOTE IN FULL BY THE DATE SPECIFIED WILL RESULT IN A FORFEITURE OF ALL RIGHTS TO THE PERMIT AND THE POSSIBILITY OF LEGAL ACTION BEING INSTITUTED AGAINST YOU. (b) In each case of a limited entry permit being pledged as security under AS 16.10.333 or 16.10.338, the debtor shall maintain on file with the department an address where notice of default is to be sent, if necessary, and where that notice will be timely received by the debtor. (c) Upon presentation of evidence of mailing in accordance with (a) of this section, the receipt of the notice of default by the debtor will be presumed for all purposes. This presumption is rebuttable by presentation of evidence sufficient to demonstrate lack of receipt of notice through no fault of the debtor. Upon presentation of evidence sufficient to prove lack of receipt of notice through no fault of the debtor, the notice is a nullity. (d) If requested by the debtor, the commissioner may waive any of the time limits in (a) of this section for a period not to exceed 60 days if (1) the debtor demonstrates good cause for the waiver; and (2) the commissioner sets out in writing the reasons for approving the waiver. (e) Except as otherwise provided in (c) and (d) of this section, if the debtor fails to reinstate or satisfy the note within the time specified in (a)(5) of this section, the debtor's interest in the permit is terminated by operation of law without further notice. (f) Notwithstanding (a) of this section, when a debtor files bankruptcy, the debtor's interest in the limited entry permit is terminated by operation of law without further notice as of the date that the automatic stay issued in the bankruptcy is no longer in effect, unless the debtor has reaffirmed the debt. (g) If a limited entry permit that has been pledged as security under AS 16.10.333 or 16.10.338 is revoked under AS 16.43.970 , the debtor's interest in the permit is terminated by operation of law without further notice as of the date that the revocation takes effect. Sec. 16.10.337. Deficiencies and transfer of entry permits after foreclosure. (a) Upon a foreclosure on an entry permit as provided in AS 16.10.335 or the termination of a debtor's interest in an entry permit under AS 16.10.335 (g), the commissioner shall offer the commission a right of first refusal if the permit is subject to a buy-back program under AS 16.43.290 — 16.43.330 at a price equal to the amount outstanding on the note plus any costs the department directly incurred in administering the loan. (b) If the commission does not exercise its right of first refusal within 30 days after it receives the offer, or if the permit is not subject to a buy-back program under AS 16.43.290 — 16.43.330, the department shall advertise and sell the permit. If the proceeds of the sale of a permit exceed the amount necessary to pay the note in full, plus penalties, costs of administration of the note, attorney fees, and child support liens of which the department has notice, the excess shall be transferred by the commissioner to the debtor. At any time until the permit has been sold under this subsection, the debtor may repurchase the permit by paying the department the amount necessary to pay the note in full, plus penalties, costs of administration of the note, and attorney fees, as determined by the commissioner. (c) [Repealed, § 72 ch 113 SLA 1982.] (d) Nothing in this section affects the right of the commissioner to institute legal action for a deficiency resulting from a default on a note given under AS 16.10.333 . In addition to any deficiency, the debtor is liable for the costs of administering the note and for costs and attorney fees. Sec. 16.10.338. Entry permits as collateral. (a) Alaska limited entry permits may be used as security for loans under AS 16.10.310 (a). The provisions of AS 16.10.335 and 16.10.337 apply to Alaska limited entry permits pledged as security for loans in accordance with this section. (b) If a limited entry permit is pledged for security for a loan made under AS 16.10.310 (a)(1)(B) for the repair, restoration, upgrading, construction, or purchase of a vessel and the borrower thereafter fails to make a payment or defaults, the commissioner shall, in addition to the notice provided under AS 16.10.335 (a), notify the borrower that subject to the commissioner's acceptance the borrower may sell the vessel, apply the sales proceeds to the debt, and renegotiate payment of the balance due on the loan to avoid the immediate loss of the limited entry permit that has been pledged for security for the loan.

(c) If a limited entry permit is pledged for security for a loan made under AS 16.10.310 (a)(1)(C) for the purchase of quota shares and the borrower thereafter fails to make a payment or defaults, the commissioner shall, in addition to the notice provided under AS 16.10.335 (a), notify the borrower that subject to the commissioner's acceptance the borrower may sell the quota shares, apply the sales proceeds to the debt, and renegotiate payment of the balance due on the loan to avoid the immediate loss of the limited entry permit that has been pledged for security for the loan. Sec. 16.10.339. Regulations. The department shall adopt regulations to implement AS 16.10.333 — 16.10.337. Sec. 16.10.340. Commercial fishing revolving loan fund. (a) There is a commercial fishing revolving loan fund to carry out the purpose of AS 16.10.300 — 16.10.370. (b) Money in the fund may be used by the legislature to make appropriations for costs of administering AS 16.10.300 — 16.10.370. (c) If the commissioner determines that the fund contains money that is excess to that needed to carry out the purpose of AS 16.10.300 — 16.10.370, then the commissioner may use the excess money to carry out the purpose of AS 16.10.500 — 16.10.560. Sec. 16.10.342. Foreclosure expense account. (a) There is established as a special account within the commercial fishing revolving loan fund the foreclosure expense account. (b) [Repealed, § 72 ch 113 SLA 1982.] (c) The commissioner may expend money credited to the foreclosure expense account when necessary to protect the state's security interest in collateral on loans granted under AS 16.10.300 — 16.10.370 or to defray expenses incurred during foreclosure proceedings after a default by an obligor. Sec. 16.10.345. Community quota entity revolving loan fund. Sec. 16.10.350. Administration of fund. (a) The commissioner shall administer the commercial fishing revolving loan fund. (b) The commissioner shall annually prepare a report detailing the number and nature of reinstatements authorized by AS 16.10.335 (a)(5) and notify the legislature that the report is available. Sec. 16.10.353. Waiver of confidentiality. (a) The commissioner may release information about a borrower's loan to any individual when release of the information has been authorized by the borrower. (b) A person obtaining a loan under AS 16.10.300 — 16.10.370 after June 28, 1991 may, by signing a form prepared for the purpose, designate the names of persons and organizations to whom a copy of the notice required by AS 16.10.335 must be sent. Sec. 16.10.355. Disposal of property acquired by default or foreclosure. The department shall dispose of property acquired through default or foreclosure of a loan made under AS 16.10.300 — 16.10.370 or former AS 16.10.650 — 16.10.720. 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, but may not be by lease. Sec. 16.10.360. Definitions. In AS 16.10.300 — 16.10.370, (1) “commission” means the Alaska Commercial Fisheries Entry Commission; (2) “commissioner” means the commissioner of commerce, community, and economic development; (3) “debtor” means an individual commercial fisherman who either initially contracts for a loan under AS 16.10.333 — 16.10.337 or assumes a loan as provided in those sections; (4) “department” means the Department of Commerce, Community, and Economic Development; (5) “quota share” means a transferable license, permit, or right issued by the federal government that conveys a right to engage in a fishery in or off Alaska and to take a specified portion of the annual harvest quota for that fishery. Sec. 16.10.370. Short title. AS 16.10.300 — 16.10.370 may be cited as the Commercial Fishing Loan Act. Article 9. Salmon Hatcheries. Sec. 16.10.375. Regional salmon plans. The commissioner shall designate regions of the state for the purpose of salmon production and have developed and amend as necessary a comprehensive salmon plan for each region, including provisions for both public and private nonprofit hatchery systems. Subject to plan approval by the commissioner, comprehensive salmon plans shall be developed by regional planning teams consisting of department personnel and representatives of the appropriate qualified regional associations formed under AS 16.10.380 . Sec. 16.10.380. Regional associations. (a) The commissioner shall assist in and encourage the formation of qualified regional associations for the purpose of enhancing salmon production. A regional association is qualified if the commissioner determines that it (1) is comprised of associations representative of commercial fishermen in the region; (2) includes representatives of other user groups interested in fisheries within the region who wish to belong; and (3) possesses a board of directors that includes no less than one representative of each user group that belongs to the association. (b) A qualified regional association, when it becomes a nonprofit corporation under AS 10.20 , is established as a service area in the unorganized borough under AS 29.03.020 for the purpose of providing salmon enhancement services. (c) In this section “user group” includes, but is not limited to, sport fishermen, processors, commercial fishermen, subsistence fishermen, and representatives of local communities. Sec. 16.10.400. Permits for salmon hatcheries. (a) The commissioner or a designee may issue a permit, subject to the restrictions imposed by statute or regulation under AS 16.10.400 — 16.10.470, to a nonprofit corporation organized under AS 10.20 , after the permit application has been reviewed by the regional planning team, for (1) the construction and operation of a salmon hatchery; (2) the operation of a hatchery under AS 16.10.480 . (b) The application for a permit under this section shall be on a form prescribed by the department and be accompanied by an application fee in the amount determined under (h) of this section. The commissioner may waive the submission of an application for a permit to operate a hatchery under AS 16.10.480 . (c) A hatchery permit is nontransferable. If a permit holder sells or leases a hatchery for which a permit is issued under this section, the new operator shall apply for a new permit under this section. (d) [Repealed, § 19 ch 154 SLA 1977.] (e) A qualified regional association formed under AS 16.10.380 , if it has become a nonprofit corporation under AS 10.20 , has a preference right to a permit under (a)(1) of this section if its proposed hatchery is provided for in the comprehensive plan for that region developed under AS 16.10.375 and the fresh water source exceeds one cubic foot per second minimum flow. Another local nonprofit hatchery corporation approved by a qualified regional association has an identical preference right. (f) Except for permits issued before June 16, 1976, a permit may not be issued for construction or operation of a hatchery on an anadromous fish stream unless the stream has been classified as suitable for enhancement purposes by the commissioner. The commissioner shall undertake to make such classifications in conjunction with the development of the comprehensive plan under AS 16.10.375 . (g) During the development of a comprehensive plan for a region a permit may not be issued for a hatchery unless the commissioner determines that the action would result in substantial public benefits and would not jeopardize natural stocks. (h) The department shall establish by regulation an application fee under this section in an amount that provides for the total amount of fees collected under (b) of this section to approximately equal the department's actual costs of processing permit applications under this chapter. The department shall annually review the fee level to determine whether the department's costs of processing permit applications under this chapter are approximately equal to the fees collected. If the review indicates that fees collected and these costs are not approximately equal, the department shall adjust the application fee by regulation. In January of each year, the department shall report the fee level and any revision made for the previous year under this subsection to the office of management and budget. Sec. 16.10.410. Hearings before permit issuance. (a) At least 30 days before the issuance of a permit under AS 16.10.400 , a public hearing shall be held in a central location in the vicinity of the proposed hatchery facility. (b) Notice of the hearing shall be published in a newspaper of general circulation once a week for three consecutive weeks, with completion of the notice at least 10 days before the hearing. (c) The hearing shall be conducted by the department. At a hearing for a permit under AS 16.10.400 (a)(1), the applicant shall present a plan for the proposed hatchery, describing the capacity of the hatchery and other relevant facts that may be of interest to the department or the public. Interested members of the public shall be afforded an opportunity to be heard. (d) The department shall record and consider objections and recommendations offered by the public at the hearing conducted under this section. It shall respond in writing, within 10 days after the hearing is held, to any specific objections offered by a member of the public at the hearing. Sec. 16.10.420. Conditions of a permit. (a) The department shall require, in a permit issued to a hatchery operator, that (1) salmon eggs procured by the hatchery must be from the department or a source approved by the department; (2) salmon eggs or resulting fry may not be placed in waters of the state other than those specifically designated in the permit; (3) salmon eggs or resulting fry, sold to a permit holder by the state or by another party approved by the department, may not be resold or otherwise transferred to another person; (4) salmon may not be released by the hatchery before department approval, and, for purposes of pathological examination and approval, the department shall be notified of the proposed release of salmon at least 15 days before the date of their proposed release by the hatchery; (5) diseased salmon be destroyed in a specific manner and place designated by the department; (6) adult salmon be harvested by hatchery operators only at specific locations as designated by the department; (7) surplus eggs from salmon returning to the hatchery be made available for sale first to the department and then, after inspection and approval by the department, to operators of other hatcheries authorized by permit to operate under AS 16.10.400 — 16.10.470; (8) if surplus salmon eggs are sold by a permit holder to another permit holder, a copy of the sales transaction be provided to the department; (9) a hatchery be located in an area where a reasonable segregation from natural stocks occurs, but, when feasible, in an area where returning hatchery fish will pass through traditional salmon fisheries. (b) Notwithstanding (a) of this section, a hatchery operator may, for the purpose of stocking a lake in the state, sell hatchery-produced salmonids to a person authorized to transport fish under regulations adopted under AS 16.05.251 . Sec. 16.10.430. Alteration, suspension, or revocation of permit. (a) If a permit holder fails to comply with the conditions and terms of the permit issued under AS 16.10.400 — 16.10.470 within a reasonable period after notification of noncompliance by the department, the permit may be suspended or revoked, in the discretion of the commissioner after the regional planning team for the area in which the hatchery is located is notified and granted an opportunity to comment upon the proposed suspension or revocation. (b) If the commissioner finds that the operation of the hatchery is not in the best interests of the public, the commissioner may alter the conditions of the permit to mitigate the adverse effects of the operation, or, if the adverse effects are irreversible and cannot be mitigated sufficiently, initiate a termination of the operation under the permit over a reasonable period of time under the circumstances, not to exceed four years. During the period of time that the operation is being terminated, the permit holder may harvest salmon under the terms of the permit but may not release additional fish. Sec. 16.10.440. Regulations relating to released fish. (a) Fish released into the natural waters of the state by a hatchery operated under AS 16.10.400 — 16.10.470 are available to the people for common use and are subject to regulation under applicable law in the same way as fish occurring in their natural state until they return to the specific location designated by the department for harvest by the hatchery operator. (b) The Board of Fisheries may, after the issuance of a permit by the commissioner, amend by regulation adopted in accordance with AS 44.62 (Administrative Procedure Act), the terms of the permit relating to the source and number of salmon eggs, the harvest of fish by hatchery operators, and the specific locations designated by the department for harvest. The Board of Fisheries may not adopt any regulations or take any action regarding the issuance or denial of any permits required in AS 16.10.400 — 16.10.470. Sec. 16.10.443. Department assistance and cooperation. (a) Before and after permit issuance under AS 16.10.400 — 16.10.470, the department shall make every effort, within the limits of time and resources, to advise and assist applicants or permit holders, as appropriate, in the planning, construction, or operation of salmon hatcheries. (b) Nothing in this section exempts an applicant or permit holder from compliance with AS 16.10.400 — 16.10.470 or from compliance with the regulations or restrictions adopted under AS 16.10.400 — 16.10.470. Sec. 16.10.445. Egg sources. (a) The department shall approve the source and number of salmon eggs taken under AS 16.10.400 — 16.10.470. (b) Where feasible, salmon eggs utilized by a hatchery operator shall first be taken from stocks native to the area in which the hatchery is located, and then, upon department approval, from other areas, as necessary. Sec. 16.10.450. Sale of salmon and salmon eggs: use of proceeds; quality and price. (a) Except as otherwise provided in a contract for the operation of a hatchery under AS 16.10.480 , a hatchery operator who sells salmon returning from the natural waters of the state, or sells salmon eggs to another hatchery operating under AS 16.10.400 — 16.10.470, after utilizing the funds for reasonable operating costs, including debt retirement, expanding its facilities, salmon rehabilitation projects, fisheries research, or costs of operating the qualified regional association for the area in which the hatchery is located, shall expend the remaining funds on other fisheries activities of the qualified regional association. (b) Fish returning to hatcheries and sold for human consumption shall be of comparable quality to fish harvested by commercial fisheries in the area and shall be sold at prices commensurate with the current market. Sec. 16.10.455. Cost recovery fisheries. (a) A hatchery permit holder may harvest salmon for a facility in (1) a special harvest area through agents, or employees of or persons under contract with the permit holder as provided under a permit from the department or regulations of the Board of Fisheries; or (2) a terminal harvest area through the common property fishery under this section. (b) A hatchery permit holder may, by a majority vote of the membership of the hatchery permit holder's board, elect to harvest surplus salmon produced at a facility in a terminal harvest area established for that facility through the common property fishery. At the request of the hatchery permit holder and if the commissioner of fish and game determines that there are no allocative issues involved, and after reasonable consultation with affected commercial fishermen and the organizations of affected commercial fishermen, the commissioner may adopt regulations governing the harvest of surplus salmon in a terminal harvest area when the hatchery permit holder elects to harvest surplus salmon produced at a facility through a common property fishery. The regulations must specify the terms, conditions, and rules under which the common property fishery in the terminal harvest area shall be conducted, including requirements for hold inspections and reporting of harvests and sales of salmon taken in the terminal harvest area. Following adoption of regulations by the department, each year before March 10, the hatchery permit holder's board, by a majority vote of the board's membership, may determine whether the hatchery will operate under the regulations adopted under this subsection during the current calendar year, and shall notify the department if the hatchery intends to operate under the regulations adopted under this subsection. The Board of Fisheries may adopt regulations under AS 16.05.251 regarding a fisheries management plan governing operations under this subsection in a terminal harvest area, including allocation plans. Participation in the fishery must be open to all interim-use permit and entry permit holders who hold permits to operate a type of gear that may be used in the fishing district in which the terminal harvest area is located if that type of gear is authorized by regulation to be used in the terminal harvest area. An interim-use permit holder or an entry permit holder who takes salmon in a common property fishery in a terminal harvest area may sell the salmon to any fish buyer or processor who is licensed to do business in the state. (c) As a condition of participation in a common property salmon fishery in a terminal harvest area under this section, a fisherman who participates in the fishery is subject to the payment of the assessment levied under (d) of this section on the projected value of the salmon or on the pounds of salmon harvested. The assessment is levied on the salmon that the fisherman takes in the terminal harvest area and sells to a licensed buyer. The buyer of the salmon must be licensed under AS 43.75 , and the buyer shall collect the assessment on salmon taken in a terminal harvest area at the time of purchase and remit the assessment to the Department of Revenue in accordance with regulations adopted by the Department of Revenue. (d) The Department of Revenue may, by regulation, annually, by March 1 of each year, set the assessment levied on salmon taken in a terminal harvest area in consultation with the Department of Commerce, Community, and Economic Development, the hatchery permit holder, and representatives of affected commercial fishermen. The assessment shall provide sufficient revenue to cover debt service to the state, reasonable operating expenses, reasonable maintenance expenses, and development or maintenance of a reserve fund up to 100 percent of annual operating costs of the hatchery permit holder. In setting the assessment, the department shall consider the estimated return and harvest of salmon in the terminal harvest area, the projected price to be paid for salmon in the region, the amount of the existing reserve held by the hatchery permit holder, and the amount by which the assessment collected in previous years exceeded or fell short of the amount anticipated to be collected. The assessment may not exceed 50 percent of the value of the salmon. The department may levy the assessment as a percentage of the projected value of the salmon returning to the terminal harvest area or as a flat rate on each pound of salmon harvested in the area, to the nearest whole cent. (e) The Department of Revenue shall deposit the assessments collected under this section in the general fund. The legislature may appropriate the funds collected under this section to the hatchery permit holder who operates a facility in the terminal harvest area in which the assessment was levied. A hatchery permit holder shall use funds appropriated under this subsection for the purposes set out under AS 16.10.450 (a). The legislature may also appropriate funds collected under this section to the Department of Revenue for costs incurred by the department under this section. (f) A person who violates a regulation adopted under (b) of this section is guilty of a violation under AS 16.05.722 or a misdemeanor under AS 16.05.723 . A person who violates a regulation adopted by the Department of Revenue under (c) of this section is guilty of a class A misdemeanor. (g) In this section, (1) “facility” means a hatchery or salmon rehabilitation project for which a permit is issued under AS 16.10.400 — 16.10.470; (2) “special harvest area” means an area designated by the commissioner or the Board of Fisheries where salmon returning to a hatchery may be harvested by the hatchery operators, and, in some situations, by the common property fishery; (3) “terminal harvest area” means a harvest area, which may include a hatchery release site, established by the commissioner or the Board of Fisheries where salmon returning to a hatchery may be harvested by the common property fishery; (4) “value” has the meaning given in AS 43.75.290 . Sec. 16.10.460. Inspection of hatchery. (a) As a condition of and in consideration for a permit to operate a hatchery under AS 16.10.400 — 16.10.470, an inspection of the hatchery facility by department inspectors shall be permitted by the permit holder at any time the hatchery is operating. The inspection shall be conducted in a reasonable manner. (b) The cost of an inspection performed by the department under AS 16.10.400 — 16.10.470 shall be borne by the department. Sec. 16.10.470. Annual report. (a) A person who holds a permit for the operation of a salmon hatchery under AS 16.10.400 — 16.10.470 shall submit an annual report no later than December 15 to the department and to the qualified regional association for the area in which the hatchery is located, to include but not be limited to information pertaining to species; brood stock source; number, age, weight, and length of spawners; number of eggs taken and fry fingerling produced; and the number, age, weight, and length of adult returns attributable to hatchery releases, on a form to be provided by the department. (b) A person who holds a permit for the operation of a salmon hatchery under AS 16.10.400 — 16.10.470 and each regional association levying a voluntary assessment under AS 16.10.540 shall submit an annual financial report to the Department of Commerce, Community, and Economic Development on a form to be provided by the Department of Commerce, Community, and Economic Development. Sec. 16.10.475. Definitions. [Repealed, § 32 ch 14 SLA 1987.] Sec. 16.10.480. Contracts for the operation of state hatcheries. (a) If the department determines that it is unable to continue operating a state-owned hatchery or that it is in the best interest of the state to provide for the operation of the hatchery by another person or by another person in cooperation with the state, the department may enter into a contract for the operation or cooperative operation of the hatchery. (b) Notwithstanding AS 36.30 , when selecting a contractor under (a) of this section, the department shall give a preference to the regional association organized under AS 16.10.380 that is located in the region in which the hatchery is located. If the department determines that the preferred regional association does not meet the criteria established by the department for the contract, the department may not award the contract to the preferred regional association and shall procure the contract under AS 36.30 after considering the recommendations of the preferred regional association. (c) Except as otherwise provided in this section, a contract entered into under this section must provide that the hatchery will be operated under AS 16.10.400 — 16.10.470 and the regulations adopted under those sections. (d) The department may issue to a contractor who operates a hatchery under this section a permit to harvest adult salmon during the term of the contract at locations designated by the department. The contractor shall use funds received from the sale of adult salmon harvested under the permit to recover all or part of the costs of operating the hatchery and may use the remaining funds for improvements to the hatchery or other salmon enhancement or rehabilitation projects, fisheries research, or the contractor's reasonable operating or administrative costs in the region in which the hatchery is located including debt retirement or for other fisheries activities of the contractor. (e) A contract under this section for the operation of a hatchery may not affect the state's ownership of the hatchery and does not affect the state's responsibility to manage the resource. (f) The operation of a hatchery under a contract authorized by this section shall be conducted in accordance with the fisheries management and production goals of the department, and must be consistent with the comprehensive regional salmon plan approved under AS 16.10.375 . During the term of the contract, the department may order changes in the operation of the hatchery that are necessary to ensure consistency with the production goals of the comprehensive regional salmon plan. The contract must specify the species to be raised and the production goals for each species, and these specifications must comply with the comprehensive regional salmon plan. The department may terminate a contract if the contractor fails to operate the hatchery in accordance with the requirements established by and under this subsection. Article 10. Fisheries Enhancement Loan Program. Sec. 16.10.500. Declaration of policy. It is the policy of the state, under AS 16.10.500 — 16.10.560, to promote the enhancement of the state's fisheries by means of grants for organizational and planning purposes to regional associations described in AS 16.10.510 that have qualified under AS 16.10.380 , and by means of long-term, low interest loans for hatchery planning, construction, and operation and for planning and implementation of enhancement and rehabilitation activities including, but not limited to, lake fertilization and habitat improvement. Sec. 16.10.505. Fisheries enhancement revolving loan fund. (a) There is created within the Department of Commerce, Community, and Economic Development a revolving fund to be known as the fisheries enhancement revolving loan fund. Except as provided in (b) and (c) of this section, the fund shall be used to carry out the purposes of AS 16.10.500 — 16.10.560 and for no other purpose. 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 16.10.500 — 16.10.560, shall be paid into the fisheries enhancement revolving loan fund. (b) Money in the fund may be used by the legislature to make appropriations for costs of administering AS 16.10.500 — 16.10.560. (c) Money in the fund that the commissioner determines to be excess to that needed to carry out the purpose of AS 16.10.500 — 16.10.560 may be used to carry out the purpose of AS 16.10.300 — 16.10.370. Sec. 16.10.507. Foreclosure expense account. (a) There is established as a special account within the fisheries enhancement 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 16.10.520 or to defray expenses incurred during foreclosure proceedings after a default by an obligor. Sec. 16.10.510. Powers and duties of the commissioner. The commissioner may (1) make loans to permit holders, under AS 16.10.400 — 16.10.470, including those holders issued permits before June 24, 1977, for the planning, construction, and operation of hatchery facilities; (2) make loans to qualified regional associations that have formed a nonprofit corporation or a local nonprofit corporation approved by a qualified regional association, for preconstruction activities necessary to obtain a permit; (3) designate agents and delegate powers to them as necessary; (4) adopt regulations necessary to carry out the provisions of AS 16.10.500 — 16.10.560, including regulations to establish reasonable fees for services provided; (5) establish amortization plans for repayment of loans, not to exceed 30 years unless the commissioner has extended the term of the loan beyond 30 years under (11) of this section; (6) establish the rate of interest for loans not to exceed nine and one-half percent a year; (7) establish regional and local offices and advisory groups to carry out, or assist in carrying out, the duties and authority of the commissioner; (8) make grants for organizational and planning purposes to qualified regional associations that have formed a nonprofit corporation, in amounts not exceeding $100,000 per region and up to an additional $100,000 on a 50/50 cash matching basis with the regional associations that have an authorized royalty assessment under AS 16.10.540 ; the state portion of the matching share shall be available when a final vote for assessments is made under AS 16.10.540 ; this provision also applies to qualified regional associations that have formed a nonprofit corporation before June 24, 1977; (9) make loans to qualified regional associations that have formed a nonprofit corporation or to local nonprofit corporations approved by qualified regional associations for planning and implementation of fisheries enhancement and rehabilitation activities including, but not limited to, lake fertilization and habitat improvement; (10) refinance a debt obligation incurred by a borrower under this section if the borrower otherwise qualifies for a loan under AS 16.10.500 — 16.10.560; the interest rate for a loan to refinance a debt obligation incurred under this section may not exceed the interest rate that is in effect for new loans under this section at the time that the loan commitment for the refinancing loan is made; a loan made under this paragraph is not subject to AS 16.10.525 ; (11) extend the term of a loan made under this section if the commissioner finds that extension of the term of the loan would alleviate an undue financial hardship on the borrower; the commissioner shall submit annually a report to the legislature summarizing the commissioner's decisions during the prior calendar year to approve or deny requests to extend loans under this paragraph and the reasons for the decisions; (12) charge and collect the fees established under this section. Sec. 16.10.520. Limitation on loans. (a) A single fisheries enhancement loan may not exceed $10,000,000 for a hatchery or other enhancement or rehabilitation activity conducted under a permit granted to a qualified regional association that has formed a nonprofit corporation, or to a local nonprofit corporation approved by a qualified regional association. A loan for any other nonprofit hatchery corporation project may not exceed $1,000,000. (b) Loans for the total project costs may be made if the commissioner determines that the applicant has sufficient financial resources to insure the establishment of an equity position in the project equal to 10 percent of the loan within 10 years or less, either through a royalty assessment levied under AS 16.10.540 or other means approved by the commissioner. For purposes of this subsection, “total project costs” includes planning and construction costs for the facility and the cost of operations for not more than the first 10 years. The costs for operations shall be loaned on an annual basis. (c) All loans shall be secured by collateral satisfactory to the commissioner, including but not limited to a first deed of trust, assignment of lease and leasehold improvements, sale of surplus fish from the hatchery, or royalty assessments from fishermen levied under AS 16.10.540 . (d) The commissioner may require adequate evidence of performance in utilizing loan funds approved for an initial or preliminary project before approving a subsequent loan application. (e) The total amount of loans made or purchased in any fiscal year may not exceed the amount specifically authorized by statute. (f) The commissioner may not make a loan under AS 16.10.500 — 16.10.550 from funds available under AS 16.10.340 (c), unless the commissioner determines, in consultation with the appropriate regional planning team established under AS 16.10.375 , that the hatchery or other enhancement or rehabilitation activity for which the loan is requested will provide a significant contribution to common property fisheries, be operated in a manner beneficial to the public interest, and be managed in a financially viable manner that is reasonably expected to result in repayment of the loan. Sec. 16.10.525. Repayment of principal and interest on loans. The commissioner may not require the repayment of principal on a loan made under AS 16.10.510 for the initial period of the loan. Interest on the principal of a loan made under AS 16.10.510 does not accrue during the initial period of the loan. In this subsection, the “initial period of the loan” means a period of time determined by the commissioner that is not less than six years or more than 10 years from the date the loan is made. Sec. 16.10.530. Royalty assessment on sale of salmon. [Repealed, § 67 ch 6 SLA 1984.] Sec. 16.10.540. Voluntary assessment on sale of salmon. (a) An association of persons who hold entry permits under AS 16.43 , that consists of at least 51 percent of the persons holding entry permits and actively participating in a fishery to be benefited by a hatchery program, may levy and collect an assessment from among its members for the purpose of securing and repaying a loan made under AS 16.10.510 . (b) Upon satisfactory demonstration to the commissioner that an assessment levied under this section may reasonably be relied upon to secure and repay a loan to be made under AS 16.10.510 , the commissioner may make the loan. (c) [Repealed, § 33 ch 14 SLA 1987.] Sec. 16.10.550. Sale or transfer of mortgages and notes. [Repealed, § 14 ch 122 SLA 1980.] Sec. 16.10.555. 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 16.10.500 — 16.10.560. 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. 16.10.560. Definitions. In AS 16.10.500 — 16.10.560, (1) “commissioner” means the commissioner of commerce, community, and economic development; (2) “hatchery” means a facility for the artificial incubation of salmon eggs, which may include means for the rearing of juvenile salmon. Article 11. Chitina Dip Net Fishery. Sec. 16.10.570. Chitina dip net fishery. The department, with the cooperation of the Department of Transportation and Public Facilities and the Department of Natural Resources, shall (1) maintain and improve state-owned land used to access the Chitina dip net fishery; (2) maintain and operate sanitary facilities provided for the use of persons participating in the Chitina dip net fishery; and (3) prepare a publication showing public access routes to fishing sites on public land for the Chitina dip net fishery; the department shall distribute the publication to persons who obtain a Chitina dip net fishing permit and to the public. Secs. 16.10.600 — 16.10.620. Creation of authorities; tax exemption; powers of authority. [Repealed, § 3 ch 152 SLA 1988.] Secs. 16.10.650 — 16.10.720. Fishermen's mortgage and note program. [Repealed, § 72 ch 113 SLA 1982.] Article 12. High Seas Interception of Salmon. Sec. 16.10.750. Findings and purpose. (a) The legislature finds that (1) the salmon fishing industry is among the state's largest industries and generates hundreds of millions of dollars and thousands of jobs each year; the salmon fishery is vitally important to commercial, subsistence, personal use, and sport fishing interests, and to the state's developing tourist industry; (2) the state is committed to maintaining and enhancing its wild stocks of salmon by careful management, by initiating a 20-year rebuilding program, and by investing in the fishing industry; (3) millions of Alaska salmon are being caught and injured by high seas fisheries that intercept salmon contrary to state, federal, or international law; the high seas interception of Alaska salmon defeats the state's management and rebuilding programs, deprives the state of a return on its investment in the fishing industry, and detrimentally affects subsistence and sport fishing uses of Alaska salmon; (4) vessels that engage in the high seas interception of salmon can move relatively freely and undetected from region to region in the North Pacific and thus are able to harvest whatever species is most readily available or most valuable; by moving farther westward, a greater proportion of the take is Asian salmon; moving eastward results in a greater proportion of the take being Alaska salmon; although there is intermixing of Asian and North American salmon stocks, scientific evidence proves that even a minimal harvest of salmon within the migratory range of each species will contain Alaska salmon; (5) the illegal taking of salmon detrimentally affects the Alaska fishing industry; the illegal taking of Alaska salmon is of primary concern because of the direct and immediate effect on the state; in addition, the illegal taking of Asian salmon is also of concern because depletion of those stocks will ultimately result in a shifting of high seas fishing efforts, both legal and illegal, to Alaska salmon; (6) high seas interception of salmon occurs beyond the exclusive economic zone of the United States, or through incursion within the exclusive economic zone and the state's territorial sea, by vessels that are usually not registered in this state; moreover, these vessels are not based in Alaska and can thus avoid detection more easily than Alaska-based vessels; as a practical matter, it is extremely difficult to directly or indirectly regulate the vessels themselves; it is therefore necessary to prohibit activities within the state that give aid, comfort, and financial incentives to high seas interception of salmon. (b) The purpose of AS 16.10.750 — 16.10.800 is to prevent resources, facilities, and expertise within the state from being available to promote or facilitate the high seas interception of salmon or the making of intercepted salmon ready for or accessible to world markets. Sec. 16.10.760. Trafficking in intercepted salmon. (a) A person commits the offense of trafficking in intercepted salmon if the person (1) buys, sells, trades, processes, or possesses salmon, or attempts to buy, sell, trade, process, or possess salmon, with reckless disregard that the salmon has been, or will be, obtained by high seas interception; (2) knowingly provides financing, premises, equipment, supplies, services, power, or fuel used to buy, sell, trade, process, or possess salmon that has been, or will be, obtained by high seas interception; or (3) acts as a broker or middleman, or otherwise acts on behalf of another party, to arrange for or negotiate, or attempts to arrange for or negotiate, the purchase, sale, trade, processing, or possession of salmon, with reckless disregard that the salmon has been, or will be, obtained by high seas interception. (b) Trafficking in intercepted salmon is a class C felony. Sec. 16.10.770. Falsification related to high seas interception of salmon. (a) A person commits the offense of falsification related to high seas interception of salmon if the person creates, utters, or possesses a written instrument related to salmon, or makes an assertion for the purpose of having a written instrument related to salmon created, uttered, or accepted, with reckless disregard that the salmon was obtained by high seas interception and that the written instrument or assertion conveys misleading or untrue information about the ownership, possession, processing, origin, destination, route of shipping, type, condition, or time, place, and manner of the taking of the salmon. (b) In this section (1) “utter” has the meaning given in AS 11.46.580 (b); (2) “written instrument” has the meaning given in AS 11.46.580 (b) and includes ships' logs and papers, bills of lading and sale, documents relating to processing, shipping, and customs, and information stamped on or affixed to cans, crates, containers, freight, or a means of storage or packaging. (c) Falsification related to high seas interception of salmon is a class C felony. Sec. 16.10.780. Assisting a vessel in high seas interception of salmon. (a) A person commits the offense of assisting a vessel in high seas interception of salmon if, knowing that a vessel is in possession of salmon obtained by high seas interception or that the owner or operator of the vessel intends to engage in the imminent interception of salmon, the person (1) moves persons, cargo, or other property to or from the vessel; (2) services or repairs the vessel or its equipment; (3) provides the vessel with power, supplies, equipment, or fuel; (4) provides the vessel with information, other than weather reports, capable of aiding the high seas interception of salmon or frustrating or avoiding detection, including communicating the movements, intentions, or activities of state or federal law enforcement officials or other fishing vessels; or (5) is in charge of a docking facility, harbor, or anchorage, and permits the vessel to dock or anchor, or to remain docked or anchored. (b) It is an affirmative defense, as defined in AS 11.81.900 (b), to a violation of this section, if the person honestly and reasonably believed that the assistance provided to the vessel was necessary for humanitarian or environmental purposes or to prevent a significant loss of property. An affirmative defense under this section may not be raised, unless the person provided immediate notice, by the quickest available means, to the United States Coast Guard or the Department of Public Safety indicating the type of assistance being provided and the circumstances requiring the assistance. (c) In this section, (1) “environmental purpose” means the intent to prevent or minimize adverse ecological effects to water quality; (2) “humanitarian purpose” means the intent to provide medical services for a sick or injured person, or to prevent the loss of human life; (3) “owner or operator of the vessel” means a person who (A) has an ownership interest in the vessel; (B) has authority to control or direct the vessel's activities; or (C) physically operates a vessel or its equipment. (d) Assisting a vessel in high seas interception of salmon is a class A misdemeanor. Sec. 16.10.790. Fines. Notwithstanding the provisions of AS 12.55.035 (b) and (c), a person convicted of an offense under AS 16.10.760 — 16.10.780 may be sentenced to pay a fine not exceeding the greater of (1) $100,000; (2) three times the pecuniary gain realized by the person as a result of the offense; or (3) if the person is convicted under AS 16.10.760 , two times the fair market value of the salmon involved or contemplated in the commission of the offense. Sec. 16.10.800. Definitions. In AS 16.10.750 — 16.10.800, (1) “high seas interception,” “interception,” or a similar term means the unauthorized catching, taking, or harvesting of salmon for other than sport, subsistence, or personal use purposes, (A) throughout the migratory range of each species, by a vessel not registered under the laws of this state; or (B) beyond the territorial sea of the state by a vessel registered under the laws of the state; (2) “knowing” or “knowingly” has the meaning given for “knowingly” in AS 11.81.900 (a); (3) “process” means affecting the condition or location of salmon, including preparation, packaging, storage, refrigeration, or transportation; (4) “reckless disregard” has the meaning given for “recklessly” in AS 11.81.900 (a); (5) “salmon” means Pacific salmon and steelhead, and parts of Pacific salmon and steelhead, whether mature or immature, processed or unprocessed; and (6) “unauthorized” means contrary to a statute or regulation of the United States or the state, or to a treaty or international fishery agreement, or in violation of a foreign law. Article 13. Commercial Charter Fisheries Revolving Loan Fund. Sec. 16.10.801. Commercial charter fisheries revolving loan fund. (a) The commercial charter fisheries revolving loan fund is created in the Department of Commerce, Community, and Economic Development to carry out the purposes of AS 16.10.801 — 16.10.840. (b) The commercial charter fisheries revolving loan fund consists of the following: (1) money appropriated to, transferred to, or received by gift, grant, devise, bequest, or donation to the fund; (2) principal and interest payments or other income earned on loans or investments of the fund; (3) money chargeable to principal or interest that is collected through liquidation by foreclosure or other process on loans made under AS 16.10.801 — 16.10.840. (c) Money in the fund may be used by the legislature to make appropriations for costs of administering AS 16.10.801 — 16.10.840. Sec. 16.10.805. Powers and duties of the department. The department may (1) make loans to eligible applicants under AS 16.10.801 — 16.10.840 (A) for the purchase of charter halibut permits; (B) to refinance debt obligations made by other lenders more than 12 months before the department received the loan application and incurred by an applicant for the purchase of charter halibut fishing vessels or gear if the applicant otherwise qualifies for a loan under AS 16.10.801 — 16.10.840; the department may collect a refinancing loan origination charge as provided by regulation; (2) receive, take, hold, and administer any appropriation, transfer, gift, grant, bequest, devise, or donation of money for the fund; (3) establish amortization plans for repayment of loans, including extensions of the terms of loans; (4) allow an assumption of a loan if (A) the applicant meets the requirements established under this section; and (B) approval of the assumption would be consistent with the purposes of AS 16.10.801 — 16.10.840; (5) establish the rate of interest for loans consistent with law; (6) charge and collect fees for services provided under AS 16.10.801 — 16.10.840; (7) adopt regulations under AS 44.62 necessary to carry out the provisions of AS 16.10.801 — 16.10.840, including regulations to establish reasonable fees for services provided; and (8) designate agents and delegate powers as necessary to the agents. Sec. 16.10.810. Eligibility. (a) For an applicant to be eligible for a loan under AS 16.10.801 — 16.10.840, the applicant shall be a resident of the state, as determined under (c) of this section, and shall (1) qualify for the purchase of a charter halibut permit under applicable law; or (2) qualify as a transferee for a charter halibut permit under applicable law. (b) In addition to the requirements set out in (a) of this section, the applicant must provide to the department a document from a state financial institution stating that (1) the applicant has been denied a loan for the same purpose; or (2) a loan from the financial institution is contingent on the applicant also receiving a loan from the fund.

(c) To meet the residency requirements of (a) of this section, the applicant (1) shall physically reside in this state and maintain a domicile in this state during the 24 consecutive months preceding the date of application for the program; and (2) may not have (A) declared or established residency in another state; or (B) received residency or a benefit based on residency from another state. Sec. 16.10.815. Limitations on loans. (a) Except as provided in (b) of this section, a loan under AS 16.10.801 — 16.10.840 (1) for a charter halibut permit may not exceed the permit value determined by a 12-month rolling average set quarterly by the department for like permits; (2) for a loan other than a loan for a charter halibut permit may not exceed $100,000 a year; (3) may not exceed a term of 15 years, except for extensions under AS 16.10.805 ; (4) may not bear interest at a rate greater than the prime rate, as defined in AS 44.88.599 , plus two percentage points, but which may not be less than six percent a year or more than 10 1/2 percent a year; (5) must be secured by a first priority lien on collateral acceptable to the commissioner, which may include collateral other than a charter halibut permit; and (6) 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) The total balances outstanding on loans made to a borrower under AS 16.10.805 may not exceed $200,000. Sec. 16.10.820. Default. If the borrower defaults on a note, the department shall notify the borrower of the default and the consequences of default by mailing a notice to the borrower's most recent address provided to the department by the borrower or obtained by the department. Sec. 16.10.825. Special account established. (a) The foreclosure expense account is established as a special account within the commercial charter fisheries revolving loan fund. (b) The department may expend money credited to the foreclosure expense account when necessary to protect the state's security interest in collateral on loans granted under AS 16.10.815 or to defray expenses incurred during foreclosure proceedings after an obligor defaults. Sec. 16.10.830. Disposal of property acquired after default. The department shall dispose of property acquired through default of a loan made under AS 16.10.801 — 16.10.840. Disposal must be made in a manner that serves the best interest of the state and may include the amortization of payments over a period of years. Sec. 16.10.835. Waiver of confidentiality. The commissioner may release information about the borrower's loan to any individual if release of the information has been authorized by the borrower. Sec. 16.10.840. Definitions. In AS 16.10.801 — 16.10.840, (1) “commissioner” means the commissioner of commerce, community, and economic development; (2) “department” means the Department of Commerce, Community, and Economic Development. Article 14. Mariculture Revolving Loan Fund. Sec. 16.10.890. Declaration of policy. It is the policy of the state, under AS 16.10.890 — 16.10.945, to promote mariculture and the enhancement of the state's shellfish fisheries by means of long-term, low-interest loans. Sec. 16.10.900. Mariculture revolving loan fund. (a) The mariculture revolving loan fund is created in the Department of Commerce, Community, and Economic Development to carry out the purposes of AS 16.10.890 — 16.10.945. (b) The mariculture revolving loan fund consists of the following: (1) money appropriated to, transferred to, or received by gift, grant, devise, bequest, or donation to the fund; (2) principal and interest payments or other income earned on loans or investments of the fund; and (3) money chargeable to principal or interest that is collected through liquidation by foreclosure or other process on loans made under AS 16.10.890 — 16.10.945. (c) Money in the fund may be used by the legislature to make appropriations for costs of administering AS 16.10.890 — 16.10.945. (d) Of the total amount available annually to the department to carry out the purposes of AS 16.10.890 — 16.10.945, less any funds appropriated under (c) of this section, 60 percent shall be available solely for making loans under AS 16.10.910 (a)(1) and the remainder shall be available solely for making loans under AS 16.10.910 (a)(2). Sec. 16.10.905. Powers and duties of the department. The department may (1) make loans to eligible applicants under AS 16.10.890 — 16.10.945 for the planning, construction, and operation of a (A) mariculture business; (B) hatchery that artificially propagates marine aquatic plants or shellfish; or (C) a shellfish enhancement project; (2) receive, take, hold, and administer any appropriation, transfer, gift, grant, bequest, devise, or donation of money for the fund; (3) establish amortization plans for repayment of loans, including extensions of the terms of loans; (4) allow an assumption of a loan if (A) the applicant meets the requirements established under this section; and (B) approval of the assumption would be consistent with the purposes of AS 16.10.890 — 16.10.945; (5) establish the rate of interest for loans consistent with law; (6) charge and collect fees for services provided under AS 16.10.890 — 16.10.945; (7) adopt regulations under AS 44.62 necessary to carry out the provisions of AS 16.10.890 — 16.10.945, including regulations to establish reasonable fees for services provided; and (8) designate agents and delegate powers as necessary to the agents. Sec. 16.10.910. Eligibility. (a) For an applicant to be eligible for a loan under AS 16.10.890 — 16.10.945, the applicant shall be (1) a resident of the state who has (A) a permitted mariculture farm location in this state; and (B) experience or training in the mariculture industry; or (2) a resident of the state or entity organized under the laws of this state that (A) holds a permit under AS 16.40.100 to operate a hatchery for the purpose of producing aquatic plants or shellfish; or (B) conducts shellfish enhancement projects. (b) In addition to the requirements set out in (a) of this section, the applicant (1) may not be eligible for financing from other recognized commercial lending institutions; or (2) shall be able to obtain only a portion of the total loan request from a recognized commercial lending institution. (c) To meet the residency requirements of (a) of this section, an individual applicant (1) shall physically reside in this state and maintain a domicile in this state during the 24 consecutive months preceding the date of application for the program; and (2) may not have (A) declared or established residency in another state; or (B) received residency or a benefit based on residency from another state. Sec. 16.10.915. Limitations on loans. (a) Except as provided in (b) and (c) of this section, a loan under AS 16.10.890 —16.10.945 (1) may not exceed (A) $100,000 a year for an applicant under AS 16.10.910 (a)(1); or (B) $1,000,000 a year for an applicant under AS 16.10.910 (a)(2); (2) may not, unless extended under AS 16.10.905 , exceed a term of (A) 20 years for an applicant under AS 16.10.910 (a)(1); or (B) 30 years for an applicant under AS 16.10.910 (a)(2); (3) may not bear interest at a rate greater than the prime rate, as defined in AS 44.88.599 , plus one percentage point, but which may not be less than five percent a year or more than nine percent a year; (4) must be secured by a first priority lien on collateral acceptable to the department; and (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) Subsequent loans may be made to a borrower under (1) AS 16.10.910 (a)(1), if the total of the balances outstanding on the loans received by the borrower does not exceed $300,000; or (2) AS 16.10.910 (a)(2), if the total of the balances outstanding on the loans received by the borrower does not exceed $1,000,000. (c) A loan under AS 16.10.910 may be made for the purchase of boats or vessels determined to be integral to the operation of the farm or hatchery. (d) For a loan made under AS 16.10.890 — 16.10.945, the department may provide a reduction of the interest rate of not more than two percent if at least 50 percent of the loan proceeds are used by the borrower for purchasing products manufactured or produced in the state. When the department offers a reduction under this subsection, the department shall provide the reduction to all loan applicants who meet the criterion described in this subsection. In this subsection, “manufactured or produced” means processing, developing, or making an item into a new item with a distinct character and use. (e) The department may not make a loan to an applicant under AS 16.10.910 (a)(2) for a hatchery or shellfish enhancement project unless the department determines that the hatchery or enhancement project will (1) be managed in a financially viable manner that is reasonably expected to result in repayment of the loan; and (2) provide a significant contribution to common property fisheries or otherwise benefit the public interest. Sec. 16.10.920. Repayment of principal of and interest on loans. The department may not require the repayment of the principal of and interest on a loan made under AS 16.10.910 during the first six years of the loan. However, for a loan made under AS 16.10.910 (a)(2), the department may defer repayment of the principal of and interest on the loan for an additional period not to exceed the first 11 years of the loan. The department may provide that interest on the principal of a loan made under AS 16.10.910 (a)(1) does not accrue during a period not to exceed the first six years of the loan. For a loan made under AS 16.10.910 (a)(2), the department shall provide that interest on the principal of the loan does not accrue during the first six years of the loan, and the department may provide that interest on the principal of the loan does not accrue during an additional period not to exceed the first 11 years of the loan. Sec. 16.10.923. Voluntary assessment on sale of shellfish. (a) An association of persons who hold entry permits under AS 16.43 comprising at least 51 percent of the persons holding entry permits and actively participating in a fishery to be benefited by a hatchery program may levy and collect an assessment from among its members for the purpose of securing and repaying a loan made under AS 16.10.890 — 16.10.945. (b) Upon satisfactory demonstration to the department that an assessment levied under this section may reasonably be relied on to secure and repay a loan to be made under AS 16.10.890 — 16.10.945, the department may make the loan. Sec. 16.10.925. Default. If the borrower defaults on a note, the department shall notify the borrower of the default and the consequences of default by mailing a notice to the borrower's most recent address provided to the department by the borrower or obtained by the department. Sec. 16.10.930. Special account established. (a) The foreclosure expense account is established as a special account in the mariculture revolving loan fund. (b) The department may expend money credited to the foreclosure expense account when necessary to protect the state's security interest in collateral on loans granted under AS 16.10.910 or to defray expenses incurred during foreclosure proceedings after an obligor defaults. Sec. 16.10.935. Disposal of property acquired after default. The department shall dispose of property acquired through default of a loan made under AS 16.10.890 — 16.10.945. Disposal must be made in a manner that serves the best interest of the state and may include the amortization of payments over a period of years. Sec. 16.10.940. Waiver of confidentiality. The commissioner may release information about the borrower's loan to any individual if release of the information has been authorized by the borrower. Sec. 16.10.945. Definitions. In AS 16.10.890 — 16.10.945, (1) “commissioner” means the commissioner of commerce, community, and economic development; (2) “department” means the Department of Commerce, Community, and Economic Development; (3) “hatchery” has the meaning given in AS 16.40.199 ; (4) “mariculture” means the farming of shellfish and aquatic plants as defined in AS 16.40.199 ; (5) “shellfish enhancement project” means a project to (A) augment the yield or harvest of shellfish above naturally occurring levels using a natural, artificial, or semiartificial production system; or (B) rehabilitate a shellfish stock by restoring it to its naturally occurring levels of productivity.