AK COMMERCIAL FISHING & AG BANK; LOANS

Alaska fishers get capped-rate, permit-backed loans

The law funds loans and refinancing for people in Alaska’s commercial fishing industry through state purchases of bank shares. Subject to legislative appropriation, Alaska’s commerce department purchases nonvoting preferred shares in the Alaska Commercial Fishing and Agriculture Bank. The purchase amount equals the former Alaska capstone avionics loan fund’s uncommitted balance on July 1, 2020. Each loan requires a limited entry permit pledged by its holder as at least part of the collateral. Loans have fixed 15-year terms and fixed yearly interest rates. Rates cannot exceed the lower of the prime rate plus 2 percentage points or 5.25%. The bank generally must buy back the state’s shares 20 years after purchase. If it fails, the commissioner can appoint a receiver to run the bank until repayment. If the bank closes, the state’s shares have repayment priority over other ownership interests, after legal debts and obligations are paid. On the effective date of section 4, chapter 25, SLA 2024, the bank must submit loan records to state banking regulators. Records must remove confidential borrower information and include loan details, agreements, payment schedules, projected interest comparisons, and other requested information. Within 120 days, the department must compare total projected interest savings with the shares’ face value. If savings are lower, it must request a share buyback covering the shortfall; the bank must complete it within 30 days. The act takes effect immediately, and these provisions are repealed January 1, 2027.