Title 15 . Revenue

Chapter 145 . (Repealed)

Section 30. Loan guarantee conditions

15 AAC 145.030. Loan guarantee conditions

(a) The department will, in its discretion, guarantee a loan under AS 45.94.010 - 45.94.060 and this chapter if

(1) the loan amount does not exceed 90 percent of the appraised value of real estate pledged as collateral, and 75 percent of the appraised value of all other types of assets pledged as collateral;

(2) the lender is at risk for at least 10 percent of the loan amount; if there is more than one lender, any single lender may be at risk for less than 10 percent of the total loan amount as long as the lenders have, in combination, at least 10 percent at risk;

(3) the loan does not have a prepayment penalty;

(4) the loan does not require any compensating balances, purchases by the borrower or stock in a lender's firm, or other money paid to a lender for loan origination other than in accordance with the lender's established schedule for loan and origination fees;

(5) the department is a secured party under the terms of any security instruments, with the same rights as the lender in the event of default;

(6) the loan is to

(A) one or more corporations or other business associations or entities that meet the following conditions:

(i) the corporation, association, or entity is owned entirely by employees of the forest products business to be purchased;

(ii) the owners of the corporation, association, or entity include at least 75 percent of the employees of the forest products business to be purchased;

(iii) at least 51 percent of the owners of the corporation, association, or entity are Alaska state residents at the time the loan is made; and

(iv) no single owner of the corporation, association, or entity receives an interest greater than two percent in the corporation, association, or entity; or

(B) an employee stock ownership trust, qualifying under 28 U.S.C., secs. 401 - 405 (Internal Revenue Code), at least 51 percent of the beneficiaries of which are Alaska state residents at the time the loan is made;

(7) all releases, licenses, and permits required by local, state, and federal governmental agencies have been secured; and

(8) each lender certifies that the same degree of prudence has been applied in approving, making, and closing the loan as that which the lender applies in approving, making, and closing other commercial loans.

(b) The department must approve any changes or amendments in any loan documents including changes to security instruments, promissory notes, insurance as required by the department, and loan guarantee agreements.

History: Eff. 2/17/85, Register 93

Authority: AS 45.94.020

AS 45.94.030

AS 45.94.050