Repealed or Renumbered
Repealed or Renumbered
Repealed or Renumbered
A BIDCO capitalization loan may be subordinated to the additional capital required under AS 37.17.550 (a)(3).
If determined by the department to be advisable, the department may use money in the Alaska BIDCO fund to provide assistance to a person to complete the tasks necessary for the person to achieve a closing on a BIDCO capitalization loan. The department may provide the assistance on the terms and conditions that the department determines appropriate.
While a BIDCO loan is outstanding and the obligations of the BIDCO to the department are not discharged, the BIDCO may not surrender its license under AS 10.13 without the written consent of the department.
Repealed or Renumbered
(a) A BIDCO capitalization loan must be structured so that the full amount of the principal is due in a lump sum at the end of the loan term.
(b) Interest on a BIDCO capitalization loan accrues during the loan term and is due at the end of the loan term.
While a BIDCO loan is outstanding and the obligations of the BIDCO to the department remain undischarged, the BIDCO may not provide financing assistance to businesses located outside the state. If a business assisted by the BIDCO has multi-state or multi-national operations, the location of the business is where the largest economic benefit of the financing assistance transaction made by the BIDCO to the business is likely to occur.
While a BIDCO loan is outstanding and the obligations of the BIDCO to the department remain undischarged, the BIDCO shall allow the department to have a representative present at all meetings of the BIDCO's board of directors and of the BIDCO's shareholders, to receive all notices and information sent to the board of directors or the shareholders, to have the same access to information about the BIDCO as the directors have and as the shareholders have, and to receive additional reports or information from the BIDCO that the department reasonably requests.
Subject to AS 37.17.520 (b), a BIDCO capitalization loan for the initial capitalization of a BIDCO shall be made under the terms and conditions that the department determines to be appropriate and that are consistent with AS 37.17.500 - 37.17.690.
Subject to the provisions of AS 37.17.520 (b), if the department determines that a BIDCO, after receiving a BIDCO capitalization loan, has performed well financially and in promoting the purposes of AS 37.17.500 - 37.17.690, and if more than four years have elapsed since the loan was made, the department may make an additional loan to the BIDCO, on the terms and conditions that the department considers appropriate.
The Alaska BIDCO fund is established in the general fund. The fund consists of appropriations made to the fund by the legislature and repayments of loans made under AS 37.17.500 - 37.17.690. The fund is administered by the department under AS 37.17.500 - 37.17.690.
(a) A BIDCO capitalization loan must include a formula that allows the BIDCO to earn credits to reduce the interest and principal owed on the loan. The formula shall be based on increasing jobs and sales in some or all of the businesses financed by the BIDCO and on sustaining the increases. To the extent the department determines appropriate, the department may also provide credits in situations where the BIDCO clearly demonstrates to the department that jobs would have been lost if the BIDCO had not provided financing assistance.
(b) The department shall establish procedures and guidelines for the certification by the department of credits earned by a BIDCO under this section, including the circumstances under which the department may deny the credits. Within the guidelines, the specific decisions regarding the granting or denial of the credits are left to the discretion of the department.
(a) From the money in the Alaska BIDCO fund, the department may make loans or other financial assistance, as authorized under AS 37.17.520 - 37.17.690, to assist in the formation, capitalization, and operation of corporations that are licensed under AS 10.13.
(b) The department may not authorize new financial assistance under AS 37.17.500 - 37.17.690 without the approval of the legislature.
(1) 'additional capital' means the additional capital required under AS 37.17.550 (a)(3);
(2) 'BIDCO' means a corporation licensed under AS 10.13;
(3) 'BIDCO capitalization loan' means a loan made under AS 37.17.530 for the initial capitalization of a BIDCO;
(4) 'BIDCO loan' means a BIDCO capitalization loan or a subsequent loan made under AS 37.17.660 ;
(5) 'department' means the Department of Commerce, Community, and Economic Development.
In order to promote the purposes of AS 37.17.500 - 37.17.690, the department may establish policies under which it will keep confidential proprietary information submitted to the department by an applicant for a loan or other financial assistance under AS 37.17.500 - 37.17.690 and by a BIDCO that has received a loan or other financial assistance under AS 37.17.500 - 37.17.690. The information that is determined to be confidential under this section is not a public record under AS 40.25.110 - 40.25.220.
The purposes of AS 37.17.500 - 37.17.690 include
(1) administering the Alaska BIDCO assistance program related to loans and other financial assistance made or provided under AS 37.17.500 - 37.17.690;
(2) assisting in the formation and capitalization of one or more BIDCOs that have a highly qualified management team and a good business plan, and that are designed to operate in a profit-oriented, market-disciplined manner, with excellent prospects for long-term financial success and viability;
(3) promoting economic development by providing a new source of risk capital and management assistance for businesses, especially small- and medium-sized businesses, in geographic areas throughout the state, including businesses in rural areas and distressed areas, and including minority-owned businesses;
(4) using state resources to attract other capital resources; and
(5) promoting the successful operation of BIDCOs.
(a) Subject to AS 37.17.520 (b), the initial capitalization of a BIDCO to which the department makes a BIDCO capitalization loan must include
(1) at least $500,000 in equity investment in the BIDCO, in addition to any organization costs paid for or owed by the BIDCO;
(2) the BIDCO capitalization loan; and
(3) additional capital in an amount required by the department and on terms and conditions acceptable to the department; the additional capital may be in the form of debt, grants, equity investment in addition to the minimum equity investment requirement of $500,000 under (1) of this subsection, or a combination of debt, grants, and the equity investment.
(b) The minimum equity investment under (a)(1) of this section must be fully received by the BIDCO before or at closing of the BIDCO capitalization loan. The BIDCO capitalization loan shall be fully disbursed to the BIDCO at closing. The additional capital shall also be fully disbursed at closing; however, if the department is satisfied that there is a firm commitment for the additional capital on terms acceptable to the department, that the source for the additional capital will deliver on the firm commitment, and that the documents evidencing the additional capital have been executed and include terms acceptable to the department, the additional capital may be disbursed to the BIDCO on a phased-in basis on terms acceptable to the department.
(a) The department shall implement the program for making BIDCO capitalization loans under AS 37.17.500 - 37.17.690 in a manner designed to encourage financing assistance by BIDCOs to businesses throughout the state. Through the use of one or more formulas designed under AS 37.17.580 , the department shall provide special incentives to encourage the financing of businesses located in distressed areas, including distressed rural areas, and the financing of minority-owned businesses. In this subsection,
(1) 'member of a minority' includes a person who is black, Hispanic, or Alaska Native;
(2) 'minority-owned business' means a business that is owned, controlled, and operated by an individual who is a member of a minority and in which more than 50 percent of the net profit or loss attributable to the business accrues to a member of a minority.
(b) When determining under (a) of this section whether an area is distressed or how distressed an area is, the department may use, individually or in combination, factors that may include unemployment, poverty, lack of access to the state highway system, lack of access to a marine transportation system, or other factors the department determines to be appropriate.
(a) When issuing a commitment to make a BIDCO capitalization loan, the department shall make the loan closing contingent on
(1) the BIDCO's receiving a license under AS 10.13, which may occur simultaneously with the loan closing;
(2) the BIDCO's satisfying the capitalization requirements of AS 37.17.550; and
(3) other conditions that the department may impose.
(b) The department may not issue a loan commitment under this section unless the department determines that the prospective BIDCO satisfies high quality evaluation standards as determined by the department. The evaluation standards must include the following findings:
(1) the loan is likely to substantially promote the purposes of AS 37.17.500 - 37.17.690;
(2) the BIDCO's prospective management team is highly qualified to manage the BIDCO;
(3) the BIDCO's business plan is a good business plan that, together with the management team, promotes confidence in the prospects for the long-term financial success and viability of the BIDCO; and
(4) if the department issues a loan commitment to the BIDCO, it is probable that the BIDCO will be able to satisfy the capitalization requirements of AS 37.17.550 .
When determining the amount or range of amount for a BIDCO capitalization loan, the term to maturity of the loan, the interest rate for the loan, the additional capital requirements for the loan, and the formula for earning credits under the loan, the department shall consider the following objectives:
(1) that the BIDCO will have adequate capitalization to support a highly qualified management team, to implement a business plan that, when combined with the management team, will promote confidence in the prospects of the BIDCO for long-term financial success and viability, and to otherwise promote the purposes of AS 37.17.500 - 37.17.690;
(2) that the additional capital requirement is in an amount that encourages the BIDCO to raise as much capital as feasible from sources other than the BIDCO capitalization loan, without unduly hindering the ability of the BIDCO to become operational;
(3) that the formula for earning credits under AS 37.17.580 , combined with the other terms and conditions of the loan, will be designed so that, with a reasonable performance by the BIDCO, the BIDCO will be able to earn sufficient credits to reduce the amount of principal and interest owed on the loan to zero by or before the end of the loan term; and
(4) that the formula for earning credits under AS 37.17.580 , combined with the other terms and conditions of the loan, is sufficiently challenging that the special incentives provided by the credits allowed under AS 37.17.580 remain in effect for the longest feasible time during the loan term as is consistent with meeting the other objectives identified in this section.